The Effect of a Change in Net Taxes on the Quantity

question 22

Multiple Choice

The effect of a change in net taxes on the quantity of real GDP demanded equals the resulting shift in the consumption function times _____.

• A)the marginal propensity to consume
• B)the marginal propensity to save
• C)the autonomous net tax multiplier
• D)the simple spending multiplier
• E)the marginal tax rate

---

Definitions:

Capital Structure

The particular combination of debt and equity used by a firm to finance its overall operations and growth.

Market Value

The current quoted price at which an asset or a company is bought or sold on the marketplace.

Book Value

The total worth of a corporation's assets after deducting its liabilities, as stated in the balance sheet.

Weighted-Average Cost

A calculation that takes into account the varying costs of items or resources, weighted by their relative importance or quantity.