Assume Autonomous Net Taxes Fall by $300, and the MPC

question 47

Multiple Choice

Assume autonomous net taxes fall by $300, and the MPC equals 2/3.Net exports, planned investment, taxes, and government purchases are autonomous and remain fixed.How will disposable income initially change?  

• A) It will rise by $900. 
• B) It will rise by $300. 
• C) It will rise by $200. 
• D) It will fall by $300.

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