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

question 13

Multiple Choice

The introduction of a $100 autonomous net tax in an economy with an MPC equal to 0.8 will,at each level of real GDP,

• A)increase equilibrium real GDP demanded by $100
• B)decrease equilibrium real GDP demanded by $100
• C)increase equilibrium real GDP demanded by more than $100
• D)decrease equilibrium real GDP demanded by less than $100
• E)decrease equilibrium real GDP demanded by more than $100

---

Definitions:

Trade Collaboration

The process of countries or businesses working together to enhance trade, improve mutual economic benefits, and facilitate the exchange of goods and services.

Common Currency

A unified currency used by multiple countries, facilitating trade and economic policies among them.

Frontier Controls

This term may refer to advanced management techniques or technologies applied at the boundary of what is known or controlled, often in the context of improving efficiency or innovation, but it's not a standard widely-recognized term.

Financial Regulations

Rules and laws that govern financial institutions, markets, and transactions to maintain stability and protect consumers.