00:01
So here we're talking macro principles.
00:02
We have several questions.
00:03
One, we are told that the npc is equal to 0 .7.
00:07
Now the multiplier, the simple multiplier with the interest rate constants, is equal to 1 over 1 minus the npc, right? that's something that you should really, really know, right? and i guess i'll call that the g -multiplier.
00:24
So this is just 1 over 1 minus 0 .7, which is 1 over 0 .3, which is equal to 3 .3.
00:32
So the answer here is b.
00:34
Two, different color.
00:37
Two, we are told that the marginal rate of marginal propensity to consume is now 0 .6, but now we're thinking about the tax multiplier.
00:47
And the tax multiplier is not as big because taxes don't directly contribute to gdp like government spending does...