For Any Change in Net Taxes,we Can Calculate the Resulting

question 16

Multiple Choice

For any change in net taxes,we can calculate the resulting change in equilibrium GDP by using the following formula:

• A) change in GDP = -MPC/(1 - MPC)
• B) change in GDP = [-MPC/(1 - MPC)]× change in taxes
• C) change in GDP = MPC ×change in taxes
• D) change in GDP = MPC/(1 - MPC)
• E) change in GDP = [-MPC/(1 - MPC)] + change in taxes

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