A change in autonomous net taxes affects the equilibrium quantity of GDP demanded
A)in the same way as a change in autonomous government purchases
B)in the same way as a change in autonomous planned investment
C)in the same way as a change in autonomous net exports
D)only indirectly,by first changing the level of disposable income
E)in an unpredictable manner

Question

Quizplus · Accepted Answer

A change in autonomous net taxes will affect disposable income, which will in turn affect consumption expenditure and the equilibrium quantity of GDP demanded. Therefore, the change in net taxes will only indirectly affect the equilibrium quantity of GDP demanded.

A Change in Autonomous Net Taxes Affects the Equilibrium Quantity