If Net Taxes Were Lowered from $5,000 to $1,000,the Marginal

question 25

Multiple Choice

If net taxes were lowered from $5,000 to $1,000,the marginal propensity to consume is 0.75,and autonomous consumption spending is $10,000,by how much would consumption increase?

• A) $3,000
• B) $1,250
• C) $7,500
• D) $3,750
• E) $750

---

Definitions:

Case Study

An in-depth investigation or analysis of an individual, group, or event to explore causation in order to find underlying principles.

Experiment

A scientific procedure conducted to test a hypothesis, determine cause-and-effect relationships, or discover new information through controlled variables and observations.

Gunshot Wound

A form of physical trauma sustained from the discharge of arms or munitions.

Memory Functions

The processes involved in the encoding, storing, and retrieving of information in the brain.