Refer to the above data.If a lump-sum tax (the same tax amount at each level of GDP) of $40 is imposed in this economy, the marginal propensity to consume is:
A).8 before taxes and .6 after taxes.
B).8 both before and after taxes.
C).6 before taxes and .8 after taxes.
D).8 before taxes and .4 after taxes.

Question

Refer to the above data.If a lump-sum tax (the same tax amount at each level of GDP) of $40 is imposed in this economy, the marginal propensity to consume is:
A).8 before taxes and .6 after taxes. 
B).8 both before and after taxes. 
C).6 before taxes and .8 after taxes. 
D).8 before taxes and .4 after taxes.

Quizplus · Accepted Answer

The Answer of  Refer to the above data.If a lump-sum tax (the same tax amount at each level of GDP) of $40 is imposed in this economy, the marginal propensity to consume is:
A).8 before taxes and .6 after taxes. 
B).8 both before and after taxes. 
C).6 before taxes and .8 after taxes. 
D).8 before taxes and .4 after taxes.

Refer to the Above Data