If a Lump-Sum Tax of $40 Billion Is Imposed and the MPC

question 46

Multiple Choice

If a lump-sum tax of $40 billion is imposed and the MPC is .6,the saving schedule will shift:

• A) downward by $24 billion.
• B) upward by $24 billion.
• C) downward by $16 billion.
• D) upward by $16 billion.

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Definitions:

Perception

The process by which individuals organize and interpret their sensory impressions to give meaning to their environment.

Synthesize

To combine various elements or ideas into a coherent and unified whole, often generating new insight or understanding.

Perceptual Selection

The psychological process by which individuals screen and select various stimuli that vie for their attention, filtering out some data while allowing other data to enter perception.

Contrast

The state of being strikingly different from something else in juxtaposition or close association.