In the Keynesian cross model, if the interest rate is constant, the MPC is 0.6, and taxes are increased by rupees 100, by how much does income change ?
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1 mark, −0.33MacroeconomicsKeynesian cross and the multiplierGovernment spending and tax multipliersEasyabout 1 min
UoH 2019 Question 6: Keynesian cross and the multiplier
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Keynesian cross and the multiplier has come up 167 times in 7 exams since 2006.
What this question tests
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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