The Introduction of a $100 Autonomous Net Tax in an Economy

question 2

Multiple Choice

The introduction of a $100 autonomous net tax in an economy with an MPC equal to 0.7 will,at each level of real GDP,

• A)increase consumption by $100
• B)decrease consumption by $100
• C)increase consumption by $70
• D)decrease consumption by $70
• E)decrease consumption by $30

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Definitions:

Polychronic Cultures

Time is used to accomplish many different things at once.

High-context Cultures

Societies or groups in which communication is heavily reliant on context, implied messages, and non-verbal cues rather than explicit words.

Nonverbal

Communication that occurs without words, through gestures, facial expressions, body language, and other physical cues.

Situational Cues

Environmental or contextual factors that influence individuals' behavior or decision-making processes.