Question

Esimates of the MPC in the US are often somewhere between 0.6 and 0.8. Suppose that the weighted average of the MPC across the population is 0.67. If someone were to receive an untaxed stimulus check from the federal government for $1,200, how much would that increase GDP, according to the simple formula? Enter your answer to the nearest cent, but do not include the dollar sign in your answer

Answer 1

Solution:-

Given that

MPC in the US are often somewhere between 0.6 and 0.8. Suppose that the weighted average of the MPC across the population is 0.67. If someone were to receive an untaxed stimulus check from the federal government for $1,200

If MPC = 0.67,  

put the values in above formula

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