Q. Suppose that the MPC out of disposable income was 0.8 and the marginal tax rate was 0.25 for a given economy. In this case, the value of the tax multiplier in the simple Keynesian model would be (Solved)
1. 1
2. -2.
3. 2.5
4. 2
- b. -2.
1. 1
2. -2.
3. 2.5
4. 2