Suppose autonomous net taxes equal $1 trillion at all levels of real GDP.What can be safely assumed about net taxes?
A) They are autonomous.
B) They are equal to transfer payments.
C) They depend on the level of real GDP.
D) They equal zero when GDP equals zero.

Question

Suppose autonomous net taxes equal $1 trillion at all levels of real GDP.What can be safely assumed about net taxes?  
A) They are autonomous. 
B) They are equal to transfer payments. 
C) They depend on the level of real GDP. 
D) They equal zero when GDP equals zero.

Quizplus · Accepted Answer

Autonomous net taxes are not dependent on the level of real GDP, hence they remain constant at $1 trillion regardless of the level of GDP.

Suppose Autonomous Net Taxes Equal $1 Trillion at All Levels