AP Macro Spending and Tax Multipliers

Front

MPC = .8
Consumption Spending Increases by $10B
What is the net effect on AD?

Back

Increase of $50B

Front

MPS = .25
Consumption Spending Increases by $5M
Investment Spending Increases by $2M
What is the net effect on AD?

Back

Increase of $28M

Front

MPS = .4
What is the Tax Multiplier?

Back

-1.5

Front

MPC = .8; Net Exports increases by $20B; Government cuts taxes by $5B; What is the net effect on AD?

Back

Increase of $120B

Front

MPC = .9
What is the spending multiplier?

Back

10

Front

MPS = .1
Government Cuts Spending by $40B
Government Cuts Taxes by $100B
What is the net effect on AD?

Back

Increase of $500B

Front

MPC = .75
Consumption Spending Increases by $10B
Investment Spending Increases by $20B
Net Exports Decrease by $5B
What is the net effect on AD?

Back

Increase by $100B

Front

MPS = .2. The government will collect an additional $50B in taxes this year. What will the net effect on GDP be?

Back

A Decrease of $200B

Front

What is the net effect on AD if MPC = .6, businesses in the US increase purchases of capital by $20B, and the government increases taxes on individual salary earners by $10B?

Back

Increase of $35B

Front

Country X is operating at an Equilibrium output level of $200B. If Country X cuts taxes by $20B with an MPC of .9 what will the Equilibrium output level be?

Back

$380B