Suppose a $100 Autonomous Net Tax Is Introduced in an Economy

question 23

Multiple Choice

Suppose a $100 autonomous net tax is introduced in an economy with an MPC equal to 0.8.How will this affect equilibrium real GDP demanded at each level of real GDP?  

• A) The equilibrium real GDP demanded will increase by $100. 
• B) The equilibrium real GDP demanded will increase by more than $100. 
• C) The equilibrium real GDP demanded will decrease by less than $100. 
• D) The equilibrium real GDP demanded will decrease by more than $100.

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Definitions:

Economic Achievement

The attainment of financial goals or milestones, often measured by income, wealth, or status.

Organizational Power

The capacity or ability of individuals or groups within an organization to influence others, make decisions, and control resources.

Gender-role Socialization

The process through which individuals learn the norms and behaviors considered appropriate for their gender in their culture.

Expressing Emotions

The act of conveying or articulating one's feelings to oneself or others, akin to emotional self-expression but with emphasis on the act of release.