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According to the Keynesian-Cross Analysis, If MPC Stands for Marginal Δ\Delta

Question 66

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According to the Keynesian-cross analysis, if MPC stands for marginal propensity to consume, then a rise in taxes of Δ\Delta T will:


A) decrease equilibrium income by Δ\Delta T.
B) decrease equilibrium income by Δ\Delta T/(1 - MPC) .
C) decrease equilibrium income by ( Δ\Delta T) (MPC) /(1 - MPC) .
D) not affect equilibrium income at all.

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