Within a closed economy, households pay $0.10 in tax for each $1 rise in gross income, and they spend 5/6 of each rise in disposable income. What is the value of the multiplier?
- A1.5
- B4.0
- C6.0
- D7.5
Economics 9708 · AS & A Level · Economic growth
Economics 9708 · AS & A Level · Economic growth
Within a closed economy, households pay $0.10 in tax for each $1 rise in gross income, and they spend 5/6 of each rise in disposable income. What is the value of the multiplier?