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suppose the marginal propensity to consume (MPC) for a nation is 0.83. What is the tax multiplier for this nation?

Sagot :

ayokenny2001

The tax multiplier for this nation with marginal propensity to consume (MPC)  of 0.83 is  -4.88

What is tax multiplier?

The tax multiplier tells us the final increase in real GDP that will occur as the result of a change in taxes.

In order to calculate the tax multiplier for this nation according to the given data we would have to calculate the following formula:

Tax multiplier for this nation

= MPC / 1 - MPC

= 0.83 / 1 - 0.83

= 0.83 / 0.17

= -4.88

Hence, The tax multiplier for this nation with marginal propensity to consume (MPC)  of 0.83 is  -4.88

Learn more about tax multiplier here : https://brainly.com/question/16965373

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