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If the Marginal Propensity to Save in a Closed Economy

Question 65

Multiple Choice

If the marginal propensity to save in a closed economy is 0.25 and a lump-sum tax is imposed, the slope of the economy's aggregate expenditures schedule will be:


A) .25.
B) less than the slope before the imposition of the tax.
C) greater than the slope before the imposition of the tax.
D) .75.

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