Suppose the Net Taxes on the Quantity of Real GDP

question 14

Multiple Choice

Suppose the net taxes on the quantity of real GDP demanded changes.How would this change be expressed?  

• A) as a shift in the consumption function times the marginal propensity to consume 
• B) as a shift in the consumption function times the marginal propensity to save 
• C) as a shift in the consumption function times the autonomous net tax multiplier 
• D) as a shift in the consumption function times the simple spending multiplier

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Definitions:

Insufficient Production

The inadequate creation or generation of a specific substance or outcome, leading to a shortfall.

Glucose In Urine

The presence of glucose in the urine, typically an indicator of high blood sugar levels and a potential sign of diabetes.

Diabetes Mellitus

Any of several related endocrine disorders characterized by an elevated level of glucose in the blood, caused by a deficiency of insulin or insulin resistance at the cellular level.

Total Cost

The sum of all costs incurred by a business in producing a certain amount of a good or service, including both fixed and variable costs.