According to the Keynesian-Cross Analysis, If MPC Stands for Marginal

question 20

Multiple Choice

According to the Keynesian-cross analysis, if MPC stands for marginal propensity to consume, then a rise in taxes of ΔT will:

• A)decrease equilibrium income by ΔT.
• B)decrease equilibrium income by ΔT / (1 - MPC).
• C)decrease equilibrium income by ΔT (MPC) / (1 - MPC).
• D)not affect equilibrium income at all.

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Definitions:

Orally Fixated

In psychoanalytic theory, a term describing individuals who experience intense satisfaction or frustration related to mouth-oriented activities due to unresolved conflicts in early psychosexual development.

Passive Dependence

A behavioral pattern where individuals excessively rely on others for support, decision-making, and taking action, often to the detriment of their independence.

Inferiority Complex

A psychological condition in which an individual feels a lack of worth and doubts their abilities, often unfairly comparing themselves to others.

Freudian Psychologist

A psychologist who follows the theories of Sigmund Freud, focusing on unconscious processes, childhood experiences, and psychosexual development.