Answer the question on the basis of the following before-tax consumption schedule for a closed economy: Refer to the 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.
Correct Answer:
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