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Suppose That the Marginal Propensity to Consume Out of Disposable

Question 18

Multiple Choice

Suppose that the marginal propensity to consume out of disposable income is 0.6 and the marginal propensity to import is 0.14.If the net tax rate is 0.1,then what is the marginal propensity to spend in this economy?


A) 0.30
B) 0.40
C) 0.46
D) 0.50
E) 0.60

Correct Answer:

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