The General Agreement on Tariffs and Trade forms the legal and institutional foundation for the current multilateral trading system

In the simple Keynesian model, if the tax function is given by T = 0.15Y and the consumption function is C = 50 + 0.7YD then a 10-unit increase in government spending would increase equilibrium income by

a. 10 units. b. 11.2 units. c. 22.4 units. d. 30 units. e. none of the above

According to the Laffer curve, when the tax rate is 100 percent, tax revenue will be

a. 0 b. at a maximum c. the same as they would be at a 50 percent tax rate d. greater than they would be at a 50 percent tax rate e. the same as they would be at a 20 percent tax rate