Suppose that the U.S.personal income tax was eliminated and replaced with a fixed tax that raised the exact same amount of revenue.The multiplier would be
A)larger.
B)unchanged.
C)smaller.
D)incalculable.

Question

Quizplus · Accepted Answer

Eliminating the U.S. personal income tax and replacing it with a fixed tax that raises the same amount of revenue would likely increase the multiplier. This is because a fixed tax is less progressive than the current income tax system, meaning it would likely reduce the marginal propensity to consume less across different income levels, leading to a larger multiplier effect on the economy.

Suppose That the U