Suppose Both Autonomous Taxes and Transfer Payments Increase by $50

question 22

Multiple Choice

Suppose both autonomous taxes and transfer payments increase by $50 billion.If the MPC = 0.75,by how much does equilibrium real GDP demanded change?

• A)$0
• B)$50 billion
• C)-$50 billion
• D)$200 billion
• E)-$200 billion

---

Definitions:

Gross Profit Method

The gross profit method estimates the cost of ending inventory and cost of goods sold based on a calculated gross profit margin, often used for interim financial reports.

Gross Profit Ratio

A financial metric that measures the proportion of money left over from revenues after accounting for the cost of goods sold.

Ending Inventory

The total value of all inventory, including raw materials, work-in-progress, and finished goods, that a business has at the end of an accounting period.

FOB Shipping Point

FOB Shipping Point, or Free On Board Shipping Point, means that the buyer takes responsibility for shipping costs and liability once the goods leave the seller's premises.