Multiple Choice
In which of the following situations will the combination of the marginal propensity to consume and the proportional income tax rate (t) result in the largest multiplier?
A) Both the MPC and t are large.
B) Both the MPC and t are small.
C) The MPC is large; t is small.
D) The MPC is small; t is large.
E) The MPC equals t.
Correct Answer:
Verified
Correct Answer:
Verified
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