The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy:
∙ marginal propensity to consume (mpc)= 0.80
∙ net tax rate (t)= 0.15
∙ no foreign trade
∙ fixed price level
∙ all expenditure and income figures are in billions of dollars. FIGURE 22-3
-Refer to Figure 22-3.What is the marginal propensity to spend (z)in this economy?
A)0.45
B)0.48
C)0.65
D)0.68
E)0.80

Question

The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy:
∙ marginal propensity to consume (mpc)= 0.80
∙ net tax rate (t)= 0.15
∙ no foreign trade
∙ fixed price level
∙ all expenditure and income figures are in billions of dollars.  FIGURE 22-3
-Refer to Figure 22-3.What is the marginal propensity to spend (z)in this economy?
A)0.45 
B)0.48 
C)0.65 
D)0.68 
E)0.80

Quizplus · Accepted Answer

The Answer of The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy:
∙ marginal propensity to consume (mpc)= 0.80
∙ net tax rate (t)= 0.15
∙ no foreign trade
∙ fixed price level
∙ all expenditure and income figures are in billions of dollars.  FIGURE 22-3
-Refer to Figure 22-3.What is the marginal propensity to spend (z)in this economy?
A)0.45 
B)0.48 
C)0.65 
D)0.68 
E)0.80

The Diagram Below Shows Desired Aggregate Expenditure for a Hypothetical