Assume that the savings function is of the form S = - 100 + (0.2) YD and the marginal income tax rate is t = 0.25.What would be the effect on the equilibrium level of output if autonomous consumption changes by change Co = - 50?
A) a decrease in output of 400
B) a decrease in output of 250
C) a decrease in output of 200
D) a decrease in output of 125
E) a decrease in output of 100
Correct Answer:
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Q18: Assume a simple model of the expenditure
Q19: In a model with no government or
Q20: If autonomous investment increases by 100 and
Q21: Assume a model with an income tax
Q22: If the savings function is S =
Q24: Assume a model with no foreign sector,
Q25: An increase in government spending will
A)not affect
Q26: Generally speaking, the effect on income resulting
Q27: Assume a simple model with no government
Q28: Assume a model of the expenditure sector
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