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Q. |
## Suppose that the MPC out of disposable income was 0.8 and the tax function for a given economy was T= -30+0.25Y. an increase in the intercept of the tax function of 10 units(from -30 to -20 would cause equilibrium income in the simple Keynesian model to fall by |

A. | -20 units |

B. | 10 units |

C. | 20 units |

D. | 40 units |

Answer» C. 20 units |

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