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Assume Autonomous Net Taxes Rise by $500; the Marginal Propensity

Question 42

Multiple Choice

Assume autonomous net taxes rise by $500; the marginal propensity to consume = 3/4.Net exports,planned investment,taxes,and government purchases are autonomous and remain fixed.Disposable income will initially


A) remain unchanged
B) fall by $500
C) fall by $375
D) fall by $2,000
E) rise by $500

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