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If a Lump-Sum Tax of $40 Billion Is Imposed and the MPC

Question 112

Multiple Choice

If a lump-sum tax of $40 billion is imposed and the MPC is 0.6, the saving schedule will:

A) shift downward by $24 billion.
B) shift upward by $24 billion.
C) shift downward by $16 billion.
D) shift upward by $16 billion.

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