To induce an increase in consumption through a tax cut, the smaller the MPC is, the Blank______ the tax cut needs to be.

Question

To induce an increase in consumption through a tax cut, the smaller the MPC is, the Blank______ the tax cut needs to be.
Multiple choice question.

smaller

larger

steadier

GPT-4o mini · Answer

To induce an increase in consumption through a tax cut, the smaller the MPC (Marginal Propensity to Consume) is, the **larger** the tax cut needs to be.