Suppose That the MPC Out of Disposable Income Was 0

question 23

Multiple Choice

Suppose that the MPC out of disposable income was 0.8 and the tax function for a given economy was T = - 30 + 0.25Y.An increase in the intercept of the tax function of 10 units (from - 30 to - 20) would cause equilibrium income in the simple Keynesian model to fall by

• A)-20 units.
• B)10 units.
• C)20 units.
• D)40 units.

---

Definitions:

Shareholders

Individuals or entities that own shares in a company, making them part owners and possibly entitling them to dividends.

Contingent Consideration

An additional payment in a transaction that depends on the future outcomes or events.

Liability

It's a financial obligation or amount owed by a business to creditors, typically a form of borrowing.

Fair Value

A valuation process to determine the appropriate value of assets or liabilities, based on current market conditions rather than historical cost.