Holding all else constant, an increase in consumption taxes, such as sales taxes or a VAT, will ________ the price of consumption goods and ________ output

Diminishing marginal product of labor occurs when adding another unit of labor

A) increases output by an amount larger than the output added by the previous unit of labor. B) decreases output by an amount smaller than the output added by the previous unit of labor. C) changes output by an amount smaller than the output added by the previous unit of labor. D) decreases output.

In the text, the equivalence of the goods market equilibrium in the IS model to the equilibrium in which desired investment equals desired saving is demonstrated, assuming that both government purchases and net exports are zero

Demonstrate the equivalence when both G and NX are non-zero.