If the marginal propensity to consume is two thirds, then an increase in personal income taxes of $100 will most likely result i

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If the marginal propensity to consume is two thirds, then an increase in personal income taxes of $100 will most likely result i

n If the marginal propensity to consume is two thirds, then an increase in personal income taxes of $100 will most likely result in a decrease in autonomous investment of $100. a decrease in consumption of $67 and an decrease in savings of $33. a decrease in consumption of $67 and an increase in savings of $33. a decrease in consumption of $100.

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rosijanka [135] · Answer 1 · 2023-08-25T20:51:13+03:00

When personal income taxes is increased, there would be a decrease in consumption of $67.

The marginal propensity to consume is the proportion of the disposable income that is spent. When personal income taxes are increased, there would be a decrease in the disposable income. The decrease in disposable income would reduce the income avalialbe for consumption.

Decrease in consumption = 2/3 x $100 = $67

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