Consider a Consumption Function in a Simple Macro Model with Government

Multiple Choice

Consider a consumption function in a simple macro model with government and taxes.Given a marginal propensity to consume out of disposable income of 0.9 and a net tax rate of 10% of national income,the marginal propensity to consume out of national income is

A) 0.09.
B) 0.72.
C) 0.81.
D) 0.90.
E) 1.00.