Multiple Choice
Assume that the consumption function is given by C = 200 + 0.7(Y - T) , the tax function is given by T = 100 + t1Y, and Y = 50K0.5L0.5, where K = 100 and L = 100. If t1 increases from 0.2 to 0.25, then consumption decreases by:
A) 70.
B) 140.
C) 175.
D) 250.
Correct Answer:
Verified
Correct Answer:
Verified
Related Questions
Q67: If disposable income is 4,000, consumption is
Q68: If the consumption function is given by
Q70: An example of decreasing returns to scale
Q71: When there is a fixed supply of
Q73: In the long run, the level of
Q73: According to a recent report from the
Q74: An increase in the supply of capital
Q75: The government of an economy has increased
Q85: According to the model developed in Chapter
Q102: Suppose that GDP (Y) is 5,000. Consumption