New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    Consider a closed economy wherein C = 0.8 Yd  

    , t = 0.25 , I = 900 – 50i , G = 800, L = 0.25 Y – 62.5i , M/P = 500 Where in Yd = Disposable Income, t is the tax rate, i is the interest rate, G is the government spending. Calculate the Fiscal Policy Multiplier for the above question
    A 2.5 Correct Answer Incorrect Answer
    B 1.5 Correct Answer Incorrect Answer
    C 1.67 Correct Answer Incorrect Answer
    D 1.33 Correct Answer Incorrect Answer

    Solution

     

    Practice Next