Tax multiplier, MPC, and MPS | AP Macroeconomics | Khan Academy

[@borisdorofeev5602]

Sal is the best. I can honestly say that this one man has taught me more than all of my teachers combined. Not to discredit any of my teachers, but that just shows how much knowledge he has made available to the world. I wish I have the chance to thank him in person one day.

[@alexlanglois1975]

This guy has taught me more about econ then my graduate level econ professor. Thank you so much for saving me.

[@sidrahbilal3877]

Post grad here

[@lunch7213]

Khan Academy, teaching kids Quadratic formula, exponential graphing, and taxes

[@jonathanametso]

your illustrations are very understandable , thank you

[@sanjanasupriya3264]

Sal! Did you draw them?😱😱😱

[@saaranshagarwal3334]

Wow! Very few econ teachers derive the equation ❤

[@souravkumarmusib9742]

amazingly easy explaination

[@alex_8704]

Why did the tax affect only the initial payment, and not all the reciprocal payments, which followed?

[@Aluinus]

They do. The reciprocal payments are determined by the initial sum minus potential taxes (and levies) multiplied by the multiplier.

[@jjune2653]

thanks sal!

[@BooksInShort22]

U the best 👍🏻 ❤

[@pinkocean17]

why is it -deltaT MULTIPLIED with MPC? why it is a multiplication instead of a subtraction? like, why do we multiply %60 consume ratio with a changeable amount of tax?

[@jehancharle]

amazing video!

[@osaskeys7316]

You are the best

[@sumanchowdhury6162]

Delta T is change in tax. But govt is not taking away delta T. Government is taking away whole tax. It's not the same. Discrepancy

[@rubyroobster923]

if water is wet💦 is fire lit🔥?

[@SBEMTv]

What playlist is this?

[@saleemshaikh4981]

4

[@MP-tr6vz]

I’m early

[@MP-tr6vz]

First

[@khalidmohamed154]

first

[@MrTugwit]

Khan Academy, you're teaching nonsense. At about 5:00, you have the equation: x = -Δt * MPC That's illegal subtraction: -Δt before multiplication: -Δt times MPC You can't subtract before multiplying, Dud.

[@willemvanoranje1533]

Are you serious?

[@MrTugwit]

@@willemvanoranje1533 Yes. You cannot add or subtract before multiplying: P-E-MD-AS. So in the equation: x = -Δt * MPC, you cannot increase or decrease taxes before multiplying. Khan Academy does the same stupid thing at about 3:04, with: output = x (1/(1-mpc)). It would be simpler if he would show the actual equations. Marginal propensities apply to increments, so output = x (1/(1-mpc)) should be written ΔY = ΔC (1/(1-mpc)). You cannot add to consumption and income before multiplying.

[@willemvanoranje1533]

@@MrTugwit -Δt doesn't mean you subtract anything (at least not in the way you seem to think it does). All that minus indicates is that if taxes are raised, i.e., a positive change in the t variable, that has a negative result on output (logically), so you put the minus there to let Δt negatively influence output. The order in which you're supposed to perform operations is irrelevant here.

[@MrTugwit]

@@willemvanoranje1533 "Are you serious?" If you don't want to use P-E-MD-AS, then don't use math. Kahn Academy fouled this up by not showing the equations. You can't even tell what he means by "x". Consumption? Investment? Keynes' original equations from 1936 are simple: 1) ΔY = ΔC + ΔI 2) ΔY = k ΔI Keynes said that income will increase: ΔY, by a multiple: k, of a government-spent investment increment: ΔI. He showed the marginal propensity to consume 2 ways: 3) ΔC/ΔY 4) 1- (1/k) Set 1- (1/k) equal to mpc, and you can get: 5) k = 1/(1-mpc) So Keynes' investment multiplier equation is: 2) ΔY = (1/(1-mpc)) ΔI Now spend $1 of investment: 1) ΔY = ΔC + ΔI 1 = 0 + 1 2) ΔY = (1/(1-mpc)) ΔI 1 = (1/(1- 0 )) 1 3) ΔC/ΔY = 0/1 4) 1 -(1/k) = 1 - (1/1) = 0 You don't even need Keynes' investment multiplier equation. ΔI has zero marginal propensity to consume. And adding to investment before multiplying is legal in equation 2, because multiplying by 1, is not actually multiplying. And his infinite series is: 1 + mpc + mpc^2 +... = 1/(1-mpc) 1 + 0 + 0 ^2 +... = 1/(1- 0 ) It would be simple, if Khan Academy would show the equations.

[@s3g128]

what is -1 x 3 😉

[@slitherwaz7298]

:)

[@kaizhang4005]

the farmer is a she?

[@rubyroobster923]

you obviously have never visited Communist Russia

[@rubyroobster923]

everybody's a farmer

[@007Anukul]

Looks like old times British rich person.

[@Dowskydowsky]

It’s a pat