The MPCd = 0.8. Suppose that, in the next Budget, the Chancellor decides to cut taxes by £50 million. What would be the effect on national income?
A) National income would rise by £200 million.
B) National income would rise by £40 million.
C) National income would fall by £200 million.
D) National income would rise by £250 million.
Correct Answer:
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