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Q. |
Suppose that the MPC out of disposable income was 0.8 and the marginal tax rate was 0.25 for a given economy. In this case, the value of the tax multiplier in the simple Keynesian model would be |
A. | 1 |
B. | -2. |
C. | 2.5 |
D. | 2 |
Answer» B. -2. |
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