Assume That Taxes Depend on Income

question 119

Multiple Choice

Assume that taxes depend on income. The MPC is 0.5 and t is 0.2. If government spending increases by $10 billion, the equilibrium level of output will increase by

• A) $16.7 billion.
• B) $25 billion.
• C) $50 billion.
• D) $100 billion.

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Definitions:

Mackintosh

Refers to a model of learning that suggests the attentional focus of an organism is influenced by the predictability of a stimulus.

Conditional Discrimination

The ability to differentiate among stimuli or responses based on the conditions or context in which they are presented.

Prefrontal Cortex

A region of the frontal lobe of the brain implicated in various complex behaviors, including decision making, planning, and moderating social behavior.

Hippocampus

A major component of the brain involved in memory formation, organization, and retrieval, as well as spatial navigation.