If the Marginal Propensity to Import Increases, Then the

question 340

Multiple Choice

If the marginal propensity to import increases, then the

• A) multiplier will not change in value.
• B) multiplier will increase in value.
• C) effect on the multiplier will depend on what happens to exports.
• D) multiplier will decrease in value.

---

Definitions:

Negative Income Tax

A fiscal mechanism where people earning below a certain income threshold receive supplemental pay from the government instead of paying taxes.

Poverty Reduction

The process or strategies aimed at decreasing the number of people living in poverty and improving the living conditions of the poor.

In-Kind Transfers

Non-monetary transfers of goods or services provided directly to individuals by governments or organizations as part of welfare programs.

Earned Income Tax Credit

The Earned Income Tax Credit is a refundable tax credit in certain jurisdictions intended to benefit working individuals and families, especially those with lower incomes.