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Use the Table Below to Determine the Impact on Consumption

Question 26

Multiple Choice

Use the table below to determine the impact on consumption spending of a $100 increase in net taxes. Use the table below to determine the impact on consumption spending of a $100 increase in net taxes. A) Consumption will decrease by $80. B) Consumption will increase by $80. C) The marginal propensity to consume will increase to .91. D) The marginal propensity to consume will decrease to .73. E) The change in net taxes will not change consumption.


A) Consumption will decrease by $80.
B) Consumption will increase by $80.
C) The marginal propensity to consume will increase to .91.
D) The marginal propensity to consume will decrease to .73.
E) The change in net taxes will not change consumption.

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