Assume that taxes depend on income and the MPC is 0.8 and tis 0.4. An increase in taxes of $10 billion will decrease equilibrium income by Select one: O a. $15.4 billion. O b. $25 billion. O c. $19.2 billion. O d. $27 billion.

Assume that taxes depend on income and the MPC is 0.8 and tis 0.4. An increase in taxes of $10 billion will decrease equilibrium income by Select one: O a. $15.4 billion. O b. $25 billion. O c. $19.2 billion. O d. $27 billion.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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Assume that taxes depend on income and the MPC is 0.8 and tis 0.4. An increase in taxes of $10 billion will decrease
equilibrium income by
Select one:
O a. $15.4 billion.
O b. $25 billion.
O c. $19.2 billion.
O d. $27 billion.

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