Assume Autonomous Net Taxes Rise by $500, and the Marginal

question 142

Multiple Choice

Assume autonomous net taxes rise by $500, and the marginal propensity to consume equals 0.75.Net exports, planned investment, taxes, and government purchases are autonomous and remain fixed.As a result, how will equilibrium real GDP demanded change?  

• A) It will rise by $500. 
• B) It will fall by $500. 
• C) It will rise by $1,500. 
• D) It will fall by $1,500.

---

Definitions:

Regeneration

The process of renewal, growth, or restoration, often referred to in biological contexts as well as metaphorically in cultural or spiritual terms.

Tomb of Hunting and Fishing

An Etruscan tomb located in Tarquinia, Italy, famous for its vibrant frescoes depicting scenes of hunting and fishing from the 6th century BCE.

Joy of Life

A concept or theme in art and literature that celebrates the pleasure and beauty of being alive, often depicted through vibrant, lively scenes.

Etruscan Fortunes

Refers to the wealth, influence, or fate of the Etruscans, an ancient civilization of Italy.