Assume Autonomous Net Taxes Fall by $300; the MPC =

question 33

Multiple Choice

Assume autonomous net taxes fall by $300; the MPC = 2/3.Net exports,planned investment,taxes,and government purchases are autonomous and remain fixed.As a result,consumption will initially

• A)remain unchanged
• B)rise by $300
• C)fall by $300
• D)rise by $200
• E)fall by $200

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Definitions:

Operating Expenses

Costs associated with the day-to-day operations of a business such as rent, utilities, and salaries.

Capital Budgeting

The process of planning and managing a company's long-term investments in projects and properties.

Incremental Sales

The additional revenue generated from a specific sales activity or marketing effort beyond base sales.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding direct labor and materials.