52)Consider the following consumption function: C = 800 + 0.75 YD for the fictitious economy of Zapland. If the government increases taxes by $200 million, what is the change in GDP? Assume that there is no increase in the price level. Select one: a. -$800 million b. $600 million c. $800 million d. -$600 million e. -$300 million
52)Consider the following consumption function: C = 800 + 0.75 YD for the fictitious economy of Zapland. If the government increases taxes by $200 million, what is the change in GDP? Assume that there is no increase in the price level. Select one: a. -$800 million b. $600 million c. $800 million d. -$600 million e. -$300 million
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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52)Consider the following consumption function: C = 800 + 0.75 YD for the fictitious economy of Zapland. If the government increases taxes by $200 million, what is the change in GDP? Assume that there is no increase in the price level.
Select one:
a. -$800 million
b. $600 million
c. $800 million
d. -$600 million
e. -$300 million
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