If the MPC Is 2/3, the Initial Impact of an Increase

question 44

Multiple Choice

If the MPC is 2/3, the initial impact of an increase of $12 billion in lump-sum taxes will be to cause

• A)a rightward shift in the investment demand schedule.
• B)an $8 billion downshift in the consumption schedule.
• C)a $4 billion upshift in the consumption schedule.
• D)a $12 billion downshift in the consumption schedule.