Assume Autonomous Net Taxes Rise by $400; the Marginal Propensity

question 25

Multiple Choice

Assume autonomous net taxes rise by $400; the marginal propensity to consume = 3/4.Net exports,planned investment,taxes,and government purchases are autonomous and remain fixed.As a result,saving will initially

• A)fall by $400
• B)rise by $300
• C)remain unchanged
• D)fall by $100
• E)rise by $100