In Our Simple Macro Model with Government,consider the Equation T

question 115

Multiple Choice

In our simple macro model with government,consider the equation T = (0.2) Y.Which of the following statements about this equation is correct?

• A)Total tax revenues are equal to 20% of disposable income.
• B)Total tax revenues are equal to 20% of real GDP.
• C)Net tax revenues are equal to 20% of disposable income.
• D)If national income increases by $1.00,then net tax revenue increases by $0.20.
• E)If total tax revenue increases by $0.20,then national income increases by $1.00.

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Definitions:

Shale-Oil Deposits

Underground formations containing a type of unconventional oil that is extracted through hydraulic fracturing or other methods.

Geological Research

The scientific study of the Earth, including its composition, structure, processes, and history.

Authority

The power or right to give orders, make decisions, and enforce obedience.

Tax Incentives

Financial benefits, such as reductions in taxes, provided by governments to encourage certain economic activities or investments.