Impact of MPC on Fiscal Multipliers
Suppose the marginal propensity to consume in an economy increases from 0.7 to 0.8. What is the resulting effect on the relative effectiveness of tax cuts versus government spending as fiscal policy tools?
A
Their relative effectiveness remains unchanged
B
The gap between their effectiveness remains constant
C
The gap between their effectiveness decreases
D
Tax cuts become more effective than government spending
Question Leaderboard
| Rank | |||||
|---|---|---|---|---|---|
| #1 | aadharshmeenak | 1 | 1 | 0m 00s | 100 |
| #2 | alexamb0527 | 0 | 1 | 0m 39s | -49 |
| #3 | zaarakatyal | 0 | 1 | 1m 07s | -77 |
Items per page:
10
1 – 3 of 3