If Government Increases Lump-Sum Taxes by $20 Billion and the Economy's

question 161

Multiple Choice

If government increases lump-sum taxes by $20 billion and the economy's MPC is .6, then the:

• A)consumption schedule will shift upward by $12 billion.
• B)consumption schedule will shift downward by $12 billion.
• C)equilibrium GDP will increase by $40 billion.
• D)equilibrium GDP will decrease by $12 billion.

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Definitions:

Effective Date

The date on which something, such as a law, agreement, or policy, becomes officially operational or enforceable.

Corporate Insurance

A type of insurance coverage designed to protect corporations from financial losses due to events such as property damage, liability claims, and employee-related risks.

Liability Insurance

Insurance protection that offers defense against claims related to harm or damage inflicted on other individuals or their property.

Property Damage

Harm or destruction that affects the value or usability of someone's property.