Assume the Marginal Propensity to Consume (MPC) Is 0

question 100

Multiple Choice

Assume the marginal propensity to consume (MPC) is 0.80 and the government increases taxes by $100 billion. The aggregate demand curve will shift to the:

• A) left by $80 billion.
• B) right by $200 billion.
• C) right by $400 billion.
• D) left by $400 billion.

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