Assume That the Consumption Function Is Given by C =

question 15

Multiple Choice

Assume that the consumption function is given by C = 200 + 0.7(Y - T) , the tax function is given by T = 100 + 0.2Y, and Y = 50K0.5L0.5, where K = 100. If L increases from 100 to 144, then consumption increases by:

• A)560.
• B)840.
• C)1,120.
• D)2,120.

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