The Introduction of an Autonomous Net Tax Will

question 19

Multiple Choice

The introduction of an autonomous net tax will

• A)have no effect on real GDP,since real GDP = C + I + G,which does not include taxes
• B)affect consumption through a change in disposable income
• C)affect consumption through its effect on investment
• D)affect government spending,since the government levies the tax
• E)increase real GDP,since it enables government to increase spending

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