The President proposes a reduction of personal income marginal tax rates in the United States. When marginal tax rates are reduced, there is
A) a decrease in the magnitude of the expenditure multiplier.
B) an increase in the magnitude of the expenditure multiplier.
C) a decrease in the marginal propensity to consume.
D) no change in the slope of the AE line.
E) an increase in the marginal propensity to consume.
B
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The above figure shows the U.S. market for wheat. With international trade, the gain in total surplus is equal to ________
A) area A B) area B + area C C) area D D) area C + area F E) area C + area D + area F
The figure above shows supply curves for soft drinks. Suppose the economy is at point a. A movement to point d would be the result of
A) an increase in technology. B) a decrease in the relative price of a soft drink. C) an increase in the relative price of a soft drink. D) an increase in the number of soft drink suppliers.