Question
In: Economics
The households in Trumpcow spend 72% of their income. How much do Trumpcow’s taxes have to...
The households in Trumpcow spend 72% of their income. How much do Trumpcow’s taxes have to change in order to increase output by $943? Round to the nearest hundredth decimal place (2 decimal places).
Solutions
Expert Solution
MPC = 0.72
Change in output = $943.
Using the formula:
So, the taxes must fall by $366.73 to increase output by $943.
Rahul Sunny answered 2 years agoRelated Solutions
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