Multiple Choice
If the marginal propensity to consume were 0.9 and a constant 20 percent tax were applied to all income, then an increase in income of $10 would cause consumption expenditure to climb by
A) 72 percent.
B) $0.72.
C) $7.20.
D) $9.00.
E) $8.00.
Correct Answer:
Verified
Correct Answer:
Verified
Related Questions
Q1: In the aggregate demand model, changes in
Q2: The general shape of an aggregate demand
Q3: Slack exists even in a vigorous U.S.
Q4: Macroeconomists generally believe that year-to-year fluctuations in
Q6: Consider a closed economy in which consumption
Q7: In the macroeconomic model developed in the
Q8: <sup>Let a small closed economy consist of
Q9: Of the many ways to measure GDP,
Q10: The short-run and long-run models used to
Q11: Consider a closed economy in which consumption