In which of the following situations will the combination of the marginal propensity to consume and the proportional income tax rate (t) result in the largest multiplier?
A) Both the MPC and t are large.
B) Both the MPC and t are small.
C) The MPC is large; t is small.
D) The MPC is small; t is large.
E) The MPC equals t.
Correct Answer:
Verified
Q1: With a proportional income tax,
A)the tax multiplier
Q3: When we relax the assumption that net
Q4: If the MPC is equal to .75
Q5: With a proportional income tax,
A)each individual pays
Q6: In a model with a proportional income
Q7: The balanced budget multiplier
A)increases as MPC increases
B)increases
Q8: If the government increased autonomous net taxes
Q9: If the government wants to increase equilibrium
Q10: If the MPC equals 0.75 and the
Q11: If the MPC = 0.8 and both
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