If the tax function is T = t0 + t1Y where t1 equals 1/3, and if the ma
If the tax function is T = t0 + t1Y where t1 equals 1/3, and if the marginal propensity to consume out of disposable income is 3/4, then the change in GDP per unit change in t0 (ΔY/Δt0) will be
a. − 1.
b. + 1.
c. − 1.5.
d. − 2.
e. + 1.5.
ANSWER
C
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