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In an Aggregate Expenditures Diagram the Imposition of a Lump-Sum

Question 113

Multiple Choice

In an aggregate expenditures diagram the imposition of a lump-sum tax (T) will:


A) not affect the C + Ig + Xn line.
B) shift the C + Ig + Xn line upward by an amount equal to T.
C) shift the C + Ig + Xn line downward by an amount equal to T.
D) shift the C + Ig + Xn line downward by an amount equal to T × MPC.

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