During the COVID pandemic, the personal savings rate soared to 33.8%. Assume your average tax...
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Finance
During the COVID pandemic, the personal savings rate soared to 33.8%. Assume your average tax rate during this time is 32%. During this time, the Federal Government spent $1.4T on COVID Relief which included stimulus checks. Assuming this stands and an additional $1T of taxes were collected, answer the following questions.
1. What is the fiscal multiplier?
1.1 What is the tax multiplier?
1.2 What is the balanced budget multiplier?
1.3 How much of the $1.4T was added to aggregate demand assuming $1T of additional tax
revenue?
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