If a government does decide to stimulate economic activity via a
tax cut, then such a tax cut will have a greater expansionary
impact if it is aimed primarily at those with an MPC of _______ as
opposed to those with an MPC of ________ . This is because
______________. Group of answer choices
0.4; 0.6; the lower is the MPC the higher is the value of the
consumption multiplier, so the expansionary impact will be higher
with a lower MPC than with a higher MPC
0.6; 0.4; the higher is the MPC the higher is the value of the
consumption multiplier, so the expansionary impact will be higher
with a higher MPC than with a lower MPC
0.4, 0.6; the consumption multiplier rises as MPC falls, so the
expansionary impact will be higher with a lower MPC than with a
higher MPC
0.6; 0.4; the higher is the MPC the higher is the value of the
consumption multiplier, so the expansionary impact will be lower
with a higher MPC than with a lower MPC
If a government does decide to stimulate economic activity via a tax cut, then such a tax cut will have a greater expans
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