If Transfer Payments and Autonomous Taxes Both Increase by Identical

question 63

Multiple Choice

If transfer payments and autonomous taxes both increase by identical amounts,

• A)equilibrium income will increase by the amount of the increase
• B)equilibrium income will increase by more than the increase
• C)equilibrium income will increase by less than the increase
• D)the change in equilibrium income will depend on the value of the MPC
• E)there will be no change in equilibrium income

---

Definitions:

Incremental Improvements

Small, continuous enhancements made to a product or process over time, aiming for better efficiency or performance.

R&D Expenditures

Research and Development (R&D) Expenditures refer to the funds allocated by businesses or governments towards the investigation and development of new products, processes, or services.

Scientific Research

The systematic investigation into and study of materials and sources in order to establish facts and reach new conclusions, typically involving controlled experiments or observational studies.

U.S. Business Firms

Companies operating within the United States, engaged in commercial, industrial, or professional activities.