Neco Model Questions Vol1 2019 Economics Question 10
Practice objective / multiple choice question 10 from the 2019 Neco Model Questions Vol1 Economics examination.
The marginal propensity to consume (MPC) in an economy is \(0.75\). The government decides to increase its spending by \(\text{₦}200\) billion. (a) Calculate the resulting change in equilibrium national income using the expenditure multiplier. (b) What increase in taxes would be required to keep the equilibrium national income unchanged? (Express the tax increase in billions of naira, rounded to two decimal places.)
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This is Neco Model Questions Vol1 2019 Economics Question 10. It is one of the objective questions from the 2019 Neco Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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