S

Shiva Ram • 30.44K Points
Instructor I

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

Correct Answer - Option(B)

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