Assume a model with an income tax rate of t = 0.25 and a marginal propensity to consume of c = 0.8.What could cause the level of equilibrium income to decrease by 1,000?
A) a decrease in autonomous net exports of 400
B) a decrease in autonomous saving of 200
C) a decrease in government purchases of 250
D) a decrease in government transfer payments of 500
E) an increase in autonomous investment of 500
Correct Answer:
Verified
Q16: Assume a model with no government or
Q17: Total autonomous spending
A)is dependent on the level
Q18: Assume a simple model of the expenditure
Q19: In a model with no government or
Q20: If autonomous investment increases by 100 and
Q22: If the savings function is S =
Q23: Assume that the savings function is of
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
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents