Calculate the marginal propensity to consume

Reference no: EM13134171

Consider our standard formula for GDP: Y=C+I+G+X. Additionally note that consumption is given by: C = a+b(Y-T) where T= -20+0.2Y. You also know that : a=150 ; I = 500 ; G = 385 ; X = -7 Furthermore you know that the marginal propensity to save (MPS)equals 0.4

Calculate the following: a.) Marginal Propensity to Consume b.) Government spending multiplier c.) Tax multiplier d.) Y* e.) Government Deficit

Reference no: EM13134171

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