Imagine there are two countries that are identical, except for their marginal propensities to consume (MPC). They both e
Posted: Thu May 19, 2022 10:14 am
Imagine there are two countries that are identical, except for
their marginal
propensities to consume (MPC). They both experience the same
decrease
in consumption spending. Country A has a MPC=0.9 and
Country B has a MPC=0.6. If both governments implement the
same
fiscal policy response will the effects be the same? Why/ why
not?
their marginal
propensities to consume (MPC). They both experience the same
decrease
in consumption spending. Country A has a MPC=0.9 and
Country B has a MPC=0.6. If both governments implement the
same
fiscal policy response will the effects be the same? Why/ why
not?