Assume Autonomous Net Taxes Rise by $400; the Marginal Propensity

question 21

Multiple Choice

Assume autonomous net taxes rise by $400; the marginal propensity to consume = 3/4.Net exports,planned investment,taxes,and government purchases are autonomous and remain fixed.As a result,consumption will initially

• A)fall by $400
• B)rise by $400
• C)fall by $300
• D)rise by $300
• E)remain unchanged

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