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    Question

    Consider a closed economy wherein

    C = 0.8 Yd   , t = 0.25 , I = 900 – 50i , G = 800, L = 0.25 Y – 62.5i , M/P = 500

    Where in Yd = Disposable Income, t is the tax rate, i is the interest rate, G is the government spending. Calculate the Fiscal Policy Multiplier for the above question

    For the above question calculate the Monetary Policy Multiplier

    A 1.80 Correct Answer Incorrect Answer
    B 2.50 Correct Answer Incorrect Answer
    C 1.11 Correct Answer Incorrect Answer
    D 1.33 Correct Answer Incorrect Answer

    Solution

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