In Which of the Following Situations Will the Combination of the Marginal

question 21

Multiple Choice

In which of the following situations will the combination of the marginal propensity to consume and the proportional income tax rate (t) result in the largest multiplier?

• A)Both the MPC and t are large.
• B)Both the MPC and t are small.
• C)The MPC is large; t is small.
• D)The MPC is small; t is large.
• E)The MPC equals t.

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