The Figure Above Shows Two Aggregate Expenditure Lines

question 186

Multiple Choice

The figure above shows two aggregate expenditure lines.
-In the figure above, what would happen to the size of the multiplier if marginal income tax rates were increased?

• A) the multiplier would rise in value
• B) the multiplier would fall in value but would not become negative
• C) the multiplier would not change in value
• D) the multiplier would fall in value and might become negative
• E) More information is needed to determine the effect on the size of the multiplier.