If the MPC is 0.8 and net taxes increase by $100 billion,what is the effect on equilibrium output?
A) There is no effect;equilibrium output is not affected by a change in net taxes.
B) Equilibrium output will fall by $80 billion.
C) Equilibrium output will fall by $125 billion.
D) Equilibrium output will fall by $400 billion.
E) Equilibrium output will fall by $500 billion.

Question

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The Answer of If the MPC is 0.8 and net taxes increase by $100 billion,what is the effect on equilibrium output?
A) There is no effect;equilibrium output is not affected by a change in net taxes.
B) Equilibrium output will fall by $80 billion.
C) Equilibrium output will fall by $125 billion.
D) Equilibrium output will fall by $400 billion.
E) Equilibrium output will fall by $500 billion.

If the MPC Is 0