A Change in Taxes of a Given Amount Shifts the Consumption

question 60

Multiple Choice

A change in taxes of a given amount shifts the consumption function vertically by ____ than that amount, because the marginal propensity to consume is ____.

• A)​less; less than 1
• B)​greater; greater than 1
• C)​greater; always equal to 1.
• D)​less; equal to zero.

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Definitions:

Dependable

Capable of being relied upon; showing reliability and consistency in actions and behavior.

Conscientious

Describing an individual who is diligent, careful, and thorough in their duties or work.

Extravert

A person who is outgoing and thrives in social situations, typically characterized by high levels of sociability and enthusiasm.

Critical Realist

A philosophical stance positing that reality exists independently of human thoughts and beliefs, but our understanding of it is always filtered through our social and personal lenses.