Assume Autonomous Net Taxes Rise by $500; the Marginal Propensity

question 34

Multiple Choice

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

• A)rise by $500
• B)fall by $500
• C)rise by $1,500
• D)fall by $1,500
• E)rise by $2,000