Neco Model Questions Vol1 2020 Economics Question 50
Practice objective / multiple choice question 50 from the 2020 Neco Model Questions Vol1 Economics examination.
The income tax rate is raised from 20 % to 25 %. The marginal propensity to consume is 0.8 and autonomous expenditure (consumption not dependent on income plus investment, government spending and net exports) equals ₦360 billion. Using the Keynesian equilibrium income formula \( Y = \frac{A}{1 - MPC(1 - t)} \) where \( t \) is the tax rate, calculate the new equilibrium national income and the change relative to the initial income of ₦1,000 billion.
Answer Options
About This Question
This is Neco Model Questions Vol1 2020 Economics Question 50. It is one of the objective questions from the 2020 Neco Model Questions Vol1 Economics examination.
Difficulty level: Medium .
Master the Exam!
You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.