1.

Supposemarginal propensity to consume is 0.75 and there is a 20 per centproportional income tax. Find the change in equilibrium income forthe following (a) Government purchases increase by 20 (b) Transfersdecrease by 20.

Answer»

Suppose
marginal propensity to consume is 0.75 and there is a 20 per cent
proportional income tax. Find the change in equilibrium income for
the following (a) Government purchases increase by 20 (b) Transfers
decrease by 20.



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