The government raises taxes by Rs. 100 billion. If the marginal propensity to consume is 0.6, what happens to the following – do they rise or fall? By what amounts? a) Public Saving b) Private Saving c) National Saving

The government raises taxes by Rs. 100 billion. If the marginal propensity to consume is 0.6, what happens to the following – do they rise or fall? By what amounts? a) Public Saving b) Private Saving c) National Saving

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter9: Aggregate Expenditures

Section: Chapter Questions

Problem 12E

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Question

The government raises taxes by Rs. 100 billion. If the marginal propensity to consume
is 0.6, what happens to the following – do they rise or fall? By what amounts?
a) Public Saving
b) Private Saving
c) National Saving

Definition Definition Income earned by a government that is not spent on current expenses, but rather saved for future investments or to pay off debts. It is the difference between government revenue and expenditures, and can be positive or negative.

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