If the government decreases spending and taxes by 1,000 units and ...

[scienceeasy]

If the government decreases spending and taxes by 1,000 units and the marginal propensity to consume is .9, then
 
  a. more information is needed.
  b. output will decrease by 900.
  c. output will decrease by 10,000.
  d. output will increase by 10,000.

Question 2

Any increase in the present value of taxes implies
 
  A) an increase in lifetime wealth and an increase in the current labor supply.
  B) an increase in lifetime wealth and a decrease in the current labor supply.
  C) a decrease in lifetime wealth and an increase in the current labor supply.
  D) a decrease in lifetime wealth and a decrease in the current labor supply.

[deja]

Answer to Question 1

C

Answer to Question 2

C