Question

5. what would happen to the marginal propensity to save when a tax cut was enacted causing the multiplier to change to 5?

Answer 1

1/6

Step-by-step explanation:

Tax multiplier us mpc/1-mpc

so as multiplier is 5 ,

5=mpc/1-mpc

so mpc 5/6

this means mps= 1-5/6

this is equal to 1/6