If the Marginal Propensity to Consume Were to Increase with No

question 21

Multiple Choice

If the marginal propensity to consume were to increase with no change in the tax rate, then the consumption function drawn on a graph with disposable income on the horizontal axis would

• A) rotate to a steeper line around the same intercept.
• B) rotate to a steeper line and start at a higher intercept.
• C) rotate to a steeper line but start from a lower intercept.
• D) rotate to a flatter line around the same intercept.
• E) shift to a parallel line starting from a higher intercept.

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Definitions:

F-distribution

A probability distribution used in analysis of variance (ANOVA), depicting ratios of variances to assess the significance of group differences.

Kruskal-Wallis Test

A nonparametric method for testing whether samples originate from the same distribution, used when the assumptions of the ANOVA are not met.

Critical Value

A point on the scale of a statistical distribution that is used to determine the boundary for rejecting the null hypothesis in hypothesis testing.

One-sample T-test

A statistical test used to compare the mean of a single sample to a known average or standard value.