Assume That the Consumption Function Is Given by C =

Multiple Choice

Assume that the consumption function is given by C = 150 + 0.85(Y - T) , the tax function is given by T = t
+ t Y, and Y is 5,000. If t
Decreases from 0.3 to 0.2, then consumption
0 1
Increases by:
1

A) 85.
B) 425.
C) 500.
D) 525.