Q. Suppose that the MPC out of disposable income was 0.8 and the tax function for a given economy was T= -30+0.25Y. an increase in the intercept of the tax function of 10 units(from -30 to -20 would cause equilibrium income in the simple Keynesian model to fall by (Solved)
1. -20 units
2. 10 units
3. 20 units
4. 40 units
- c. 20 units