Exhibit 11-3 -Refer to the Graph in the Exhibit.If the Government Wants

question 64

Multiple Choice

Exhibit 11-3

-Refer to the graph in the exhibit.If the government wants to increase equilibrium by $100 billion through a change in autonomous net taxes, autonomous net taxes might decrease.If the decrease occurs, what is the likely amount?  

• A) $100 billion
• B) $100 billion × (1 - MP
• C)/MPC
• C) $100 billion × MPC/(1 - MP
• D) $100 billion × MPC/(MPC - 1)