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    Question

    Consider a closed economy wherein

    C = 0.60 Yd   , t = 0.25 , I = 900 – 30i , G = 800, L = 0.20 Y – 50i , 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

    A 1.82 Correct Answer Incorrect Answer
    B 1.49 Correct Answer Incorrect Answer
    C 2.25 Correct Answer Incorrect Answer
    D 1.15 Correct Answer Incorrect Answer

    Solution

     

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