JNU SSS 2021 Question 21: Keynesian cross and the multiplier

When MRT =2/3, change in the government expenditure ( $\Delta$ G) =1, MPC = 1/6, find budget deficit.

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When MRT =2/3, change in the government expenditure (Δ G) =1, MPC = 1/6, find budget deficit. (A) 1/5 (B) 1/6 (C) 1/4 (D) 1/7

Also written as: When MRT =2/3, change in the government expenditure (Delta G) =1, MPC = 1/6, find budget deficit.

Keynesian cross and the multiplier has come up 167 times in 7 exams since 2006.

This question is on Government spending and tax multipliers, part of Keynesian cross and the multiplier in Macroeconomics.

The effect on income of changes in government spending, lump-sum taxes, transfers and income taxes.

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Plain-text version

When MRT =2/3, change in the government expenditure (Δ G) =1, MPC = 1/6, find budget deficit. (A) 1/5 (B) 1/6 (C) 1/4 (D) 1/7

Also written as: When MRT =2/3, change in the government expenditure (Delta G) =1, MPC = 1/6, find budget deficit.

Keynesian cross and the multiplier has come up 167 times in 7 exams since 2006.

Question from the JNU SSS 2021 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.