If the marginal tax rate increases,then the marginal propensity to expend will be smaller and the marginal leakage rate will be larger.

Question

Quizplus · Accepted Answer

When the marginal tax rate increases, individuals and businesses will have less disposable income. This will result in a smaller marginal propensity to spend, as they will have less money to spend on goods and services. In addition, the marginal leakage rate, which includes saving and taxes, will be larger due to the increase in taxes.

If the Marginal Tax Rate Increases,then the Marginal Propensity to Expend