If the Marginal Propensity to Save in a Closed Economy

question 65

Multiple Choice

If the marginal propensity to save in a closed economy is 0.25 and a lump-sum tax is imposed, the slope of the economy's aggregate expenditures schedule will be:

• A).25.
• B)less than the slope before the imposition of the tax.
• C)greater than the slope before the imposition of the tax.
• D).75.

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Definitions:

Animal Magnetism

An outdated term that referred to a naturalistic healing power or force, postulated by Franz Mesmer, thought to reside within certain individuals.

Sakel

A reference to Manfred Sakel, a psychiatrist known for introducing insulin coma therapy for psychiatric purposes in the 1930s.

Insulin

A hormone produced by the pancreas that regulates glucose levels in the blood, crucial for managing diabetes.

Schizophrenia

A complex, chronic mental health disorder marked by distorted thinking, perceptions, emotions, language, sense of self, and behavior.