Now suppose a proportional tax with a 10 percent tax rate is imposed instead of the regressive tax. Calculate and graph the new consumption schedule, and note the MPC and the multiplier.
GDP, Tax, percent DIs,
billions Consumption after tax, billions
$100 % 10 90 ? (need help)
200 %
300 %
400 %
500 %
600 %
700
MPC for proportional tax consumption schedule = .
The multiplier for the proportional tax consumption schedule =