If the MPC Is 2/3, the Initial Impact of an Increase

question 44

Multiple Choice

If the MPC is 2/3, the initial impact of an increase of $12 billion in lump-sum taxes will be to cause

• A)a rightward shift in the investment demand schedule.
• B)an $8 billion downshift in the consumption schedule.
• C)a $4 billion upshift in the consumption schedule.
• D)a $12 billion downshift in the consumption schedule.

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Definitions:

Giant Axons

Unusually large nerve fibers that facilitate rapid transmission of electrical impulses, especially notable in specific animal species.

Squid

A cephalopod mollusk known for its elongated body, large eyes, and extraordinary ability to rapidly change color and texture.

Jet-Propel

To move or be propelled forward by jets of liquid or gas, often used in the context of jet engines or aquatic propulsion mechanisms.

Squid

A cephalopod mollusk with a long body, large eyes, eight arms, and two longer tentacles, known for quick movements and intelligence.