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Macroeconomics

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Moderate

Keynesian Expenditure Multiplier

MACRO-X2DKEE

Which of the following combinations will increase the numeric value of the spending multiplier?

A

A decrease in the marginal propensity to consume and a decrease in the marginal tax rate.

B

An increase in the marginal propensity to consume and an increase in the marginal tax rate.

C

An increase in the marginal propensity to consume and a decrease in the marginal tax rate.

D

A decrease in the marginal propensity to consume and an increase in the marginal tax rate.