The President proposes a reduction of personal income marginal tax rates in the United States.When marginal tax rates are reduced, there is
A) an increase in the marginal propensity to consume.
B) an increase in the magnitude of the expenditure multiplier.
C) a decrease in the marginal propensity to consume.
D) a decrease in the magnitude of the expenditure multiplier.
E) no change in the slope of the AE line.

Question

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The Answer of The President proposes a reduction of personal income marginal tax rates in the United States.When marginal tax rates are reduced, there is
A) an increase in the marginal propensity to consume.
B) an increase in the magnitude of the expenditure multiplier.
C) a decrease in the marginal propensity to consume.
D) a decrease in the magnitude of the expenditure multiplier.
E) no change in the slope of the AE line.

The President Proposes a Reduction of Personal Income Marginal Tax