Assume That Taxes Depend on Income

question 184

Multiple Choice

Assume that taxes depend on income. The MPC is 0.8 and t is 0.25. The government spending multiplier is

• A) 1.67.
• B) 2.5.
• C) 5.
• D) 10.

---

Definitions:

Developmental Factor

Any influence, event, or condition that affects the growth and maturation of an individual, physically, mentally, or emotionally.

Personality Change

Alterations in an individual's characteristic patterns of thinking, feeling, and behaving over time.

Conscious Factor

Aspects of an individual’s psychological function that are within their immediate awareness and perception.

Unconscious Factor

Elements of thought and motivation that reside outside the conscious awareness but influence behavior and decisions.