Slope of economy aggregate expenditures schedule


If the marginal propensity to save in a closed economy is 0.25 and a lump-sum tax is imposed, the slope of the economy's aggregate expenditures schedule will be:

Choose one answer.

a. less than the slope before the tax.

b. .25.

c. .75.

d. greater than the slope before the tax.

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Macroeconomics: Slope of economy aggregate expenditures schedule
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