Question: All else equal, how would an increase in the tax rate affect thegovernment purchases multiplier? A. It increases the multiplier only if the marginal propensityto

All else equal, how would an increase in the tax rate affect thegovernment purchases multiplier?

A. It increases the multiplier only if the marginal propensityto consume if the MPC is greater than the tax rate.

B. It has no effect.

C. It increases the multiplier only if the marginal propensityto consume (MPC) is less than the tax rate.

D. It increases the government purchases multiplier.

E. It decreases the government purchases multiplier.

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