If a Lump-Sum Income Tax of $25 Billion Is Levied

question 61

Multiple Choice

If a lump-sum income tax of $25 billion is levied and the MPS is 0.20, the

• A) saving schedule will shift upward by $5 billion.
• B) consumption schedule will shift downward by $25 billion.
• C) consumption schedule will shift downward by $20 billion.
• D) consumption schedule will shift upward by $25 billion.

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