The government raises lump-sum taxes on income by $100 billion, and the neoclassical economy adjusts so that output does not change. If the marginal propensity to consume is 0.6, investment:

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The government raises lump-sum taxes on income by $100 billion, which reduces disposable income by $100 billion. The marginal propensity to consume is 0.6, so consumption falls by $60 billion (0.6 x $100 billion). This reduces aggregate demand, which leads to a fall in investment of $60 billion.

The Government Raises Lump-Sum Taxes on Income by $100 Billion