Tax cuts on business income ________ aggregate demand. A) ...

[mckennatimberlake]

Tax cuts on business income ________ aggregate demand.
 
  A) would increase B) would not change
  C) may increase or decrease D) would decrease

Question 2

Refer to Figure 23-4. Potential GDP equals 100 billion. The economy is currently producing GDP1 which is equal to 90 billion. If the MPC is 0.8, then how much must autonomous spending change for the economy to move to potential GDP?
 
  A) -18 billion B) -2 billion C) 2 billion D) 18 billion

[heinisk01]

Answer to Question 1

A

Answer to Question 2

C

[mckennatimberlake]

Gracias!

[bassamabas]

Excellent