Question

If taxes were cut by $1 trillion and the mpc was 0.90, by how much would total spending change?

Answer 1

The change in autonomous spending resulting from a $1 trillion tax cut and an MPC of 0.90 is $900 billion.

Step-by-step explanation:

The change in autonomous spending resulting from a $1 trillion tax cut and an MPC of 0.90 can be calculated by multiplying the tax cut amount by the MPC. In this case, the change in autonomous spending would be $1 trillion x 0.90 = $900 billion.