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, we can conclude that the tax:
A)enhances the economy's built-in stability.
B)reduces the economy's built-in stability.
C)neither increases nor decreases built-in stability.
D)increases the MPC and therefore increases the size of the multiplier.

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, we can conclude that the tax:
A)enhances the economy's built-in stability. 
B)reduces the economy's built-in stability. 
C)neither increases nor decreases built-in stability. 
D)increases the MPC and therefore increases the size of the multiplier.

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, we can conclude that the tax:
A)enhances the economy's built-in stability. 
B)reduces the economy's built-in stability. 
C)neither increases nor decreases built-in stability. 
D)increases the MPC and therefore increases the size of the multiplier.

Refer to the Above Data