If the Marginal Propensity to Save in a Closed Economy

question 165

Multiple Choice

If the marginal propensity to save in a closed economy is .25 and a lump-sum tax is imposed,the slope of the economy's aggregate expenditures schedule will be:

• A) .25.
• B) less than the slope before the tax.
• C) greater than the slope before the tax.
• D) .75.

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