Which of the Following Changes in Taxes Would Lead to the Greatest

question 52

Multiple Choice

Which of the following changes in taxes would lead to the greatest increase in consumption?

• A)a $15 000 decrease in taxes, if MPC equals 0.6
• B)a $20 000 decrease in taxes, if MPC equals 0.5
• C)a $12 000 decrease in taxes, if MPC equals 0.75
• D)a $30 000 decrease in taxes, if MPC equals 0.25

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