-Refer to Figure 7.1. The diagram shows one consumption function with zero income tax and the other consumption function with 20% income tax rate. We can conclude all of the following except one. The exception is:

Question

Quizplus · Accepted Answer

The slope of the consumption curve with income tax reflects the marginal propensity to consume out of after-tax income, not a specific numerical value unless given by the diagram or additional information. The other statements (A, C, D) logically follow from the effects of an income tax on consumption and the autonomous expenditure multiplier, but the slope's exact numerical value (B) cannot be concluded without specific data.