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The Introduction of an Autonomous Net Tax Will

Question 19

Multiple Choice

The introduction of an autonomous net tax will


A) have no effect on real GDP,since real GDP = C + I + G,which does not include taxes
B) affect consumption through a change in disposable income
C) affect consumption through its effect on investment
D) affect government spending,since the government levies the tax
E) increase real GDP,since it enables government to increase spending

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