Suppose the president is successful in passing a $5 billion tax increase. Assume that taxes are fixed, the economy is closed, and the marginal propensity to consume is 0.75. What happens to equilibrium GDP?
A) There is a $20 billion decrease in equilibrium GDP.
B) There is a $15 billion decrease in equilibrium GDP.
C) There is a $15 billion increase in equilibrium GDP.
D) There is a $20 billion increase in equilibrium GDP.
B
Economics
You might also like to view...
The most common form of tariff is a countervailing duty
Indicate whether the statement is true or false
Economics
Interlocking directorates are illegal under the ____ whether or not the effect may be to substantially lessen competition.
A. Clayton Act B. Robinson-Patman Act C. Sherman Antitrust Act D. Federal Trade Commission Act
Economics