If the Tax Function Is T = T₀ + T₁Y

question 42

Multiple Choice

If the tax function is T = t₀ + t₁Y where t₁ equals 1/3,and if the marginal propensity to consume out of disposable income is 3/4,then the change in GDP per unit change in t₀ (ΔY/Δt₀) will be

• A)− 1.
• B)+ 1.
• C)− 1.5.
• D)− 2.
• E)+ 1.5.

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