Consider a simple macro model with demand

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Reference no: EM13673367

Consider a simple macro model with demand-determined output. Which of the following parameters will produce the strongest automatic stabilizer?

a.
MPC = 0.8, t = 0.2, m = 0.3

b.
MPC = 0.9, t = 0.2, m = 0.4

c.
MPC = 0.7, t = 0.3, m = 0.2

d.
MPC = 0.7, t = 0.1, m = 0.4

e.
MPC = 0.8, t = 0.1, m = 0.2

Reference no: EM13673367

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