The Introduction of a Tax by the Government Will

question 92

Multiple Choice

The introduction of a tax by the government will:

• A)have no effect on real GDP since real GDP comprises consumption expenditure,investment expenditure,and government expenditure.
• 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 the government to increase spending.

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