Multiple Choice
The effect of a change in taxes is less than the same sized change in government expenditures because
A) tax rates are the same regardless of income levels.
B) the amount by which taxes change is affected by the MPC.
C) changes in government expenditure do not directly affect consumption.
D) the amount by which consumption initially changes is the MPC times the tax change.
Correct Answer:
Verified
Correct Answer:
Verified
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