Question

Consider a closed economy wherein C = 0.8 Yd

Q: Consider a closed economy wherein C = 0.8 Yd , t = 0.25 , I = 900 – 50i , G = 800, L = 0.25 Y

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, 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

B 2.50

C 1.11

D 1.33

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Question

Consider a closed economy wherein C = 0.8 Yd

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