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:

Tort

A non-criminal action causing damage or injury to another party, which subjects the wrongdoer to legal accountability through the system of torts.

Compensable Damages

Damages that a plaintiff can recover in a lawsuit, representing monetary compensation for loss or injury.

Punitive Damages

Monetary compensation awarded to a plaintiff, above and beyond actual damages, to punish the defendant for egregious conduct.

Wealthy Defendant

A term not typically used in a specific legal context, but generally refers to a defendant in a legal action who has significant financial resources.