The Effect of Imposing a Lump-Sum Tax Is to

question 84

Multiple Choice

The effect of imposing a lump-sum tax is to

• A)reduce the absolute levels of consumption and saving at each level of GDP and to reduce the size of the multiplier.
• B)reduce the absolute levels of consumption and saving at each level of GDP but to not change the size of the multiplier.
• C)reduce the absolute levels of consumption and saving at each level of GDP and to increase the size of the multiplier.
• D)increase the absolute levels of consumption and saving at each level of GDP and to increase the size of the multiplier.