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Subject - Economics:

Macroeconomics

MCQ - 202-4212

Question:

Which of the following increases the size of the tax multiplier?

  1. An increase in the marginal propensity to consume.
  2. An increase in the reserve ratio.
  3. An increase in the marginal propensity to save.
  4. An increase in the reserve ratio.
  5. A decrease in the velocity of money.

Correct Answer: A

Explanation:

Tm = M × MPC. A larger MPC increases the size of Tm.

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269 MCQ for effective preparation of the test of Macroeconomics of Economics section.

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