Use the Following Situation to Answer the Question : Situation

question 41

Multiple Choice

Use the following Situation to answer the question : situation 20-2 Assume a closed economy. Suppose that autonomous consumption equals $400, planned investment equals $500, government expenditure equals $200, net taxes equals $50, and the mpc equals 0.9.
-Using the information in Situation 20-2,if taxes increase by $10,then the equilibrium aggregate output will change by

• A)-$90.
• B)-$10.
• C)$10.
• D)$90.

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Definitions:

Inconsistent Over Time

Refers to situations where behavior, performance, or conditions change and do not follow a constant pattern across different periods.

Microeconomic Principles

The study of individual, household, and firm behaviors in decision-making and allocation of resources, often in markets where goods or services are bought and sold.

Preferred Spending

Often refers to the prioritization of budget allocation by individuals, businesses, or governments, favoring certain categories or sectors over others.

Canoeing and Kayaking

Recreational or competitive water sports involving navigating waterways in small, narrow vessels.