When the Consumption Function Is Expressed as C = 200

question 82

Multiple Choice

When the consumption function is expressed as C = 200 + .75(1- t) y where t =0.2, then an increase in income y by 100 will result in an increase in tax collection by:

• A) 20.
• B) 15.
• C) 80.
• D) 75.

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