How will the introduction of an autonomous net tax affect consumption?
A) through a change in government spending
B) through a change in disposable income
C) through its effect on investment
D) through its effect on net exports

Question

How will the introduction of an autonomous net tax affect consumption?  
A) through a change in government spending 
B) through a change in disposable income 
C) through its effect on investment 
D) through its effect on net exports

Quizplus · Accepted Answer

The introduction of an autonomous net tax would affect consumption through a change in disposable income. Autonomous net tax refers to a tax that is not dependent on the level of income or other economic variables. If the autonomous net tax increases, households will have less disposable income available for consumption. As a result, consumption spending will likely decrease.

How Will the Introduction of an Autonomous Net Tax Affect