21) If the *MPC* is 0.6 and the tax rate is 20%, a $200 decrease in autonomous net exports will decrease equilibrium income by

A) $384.

B) $416.

C) $478.

D) $1,666.

22) *C* = $5 million + 0.9(1 – 0.1)*Y*

*I* = $7 million

*G* = $6 million

*NX* = $1 million

Based on the above data, the equilibrium level of GDP is

A) $20.9 million.

B) $23.5 million.

C) $100 million.

D) $111.8 million.

23) *C* = $5 million + 0.9(1 – 0.1)*Y*

*I* = $7 million

*G* = $6 million

*NX* = $1 million

Based on the above data, the value of the expenditure multiplier is

A) 1.23.

B) 5.26.

C) 9.09.

D) 11.11.

24) *C* = $40 million + 0.6(1 – 0.2)*Y*

*I* = $35 million

*G* = $31 million

*NX* = -$6 million

Based on the above data, the equilibrium level of GDP is

A) $113.6 million.

B) $192.3 million.

C) $208.3 million.

D) $833.3 million.

25) *C* = $40 million + 0.6(1 – 0.2)*Y*

*I* = $35 million

*G* = $31 million

*NX* = -$6 million

Based on the above data, the value of the expenditure multiplier is

A) 1.14.

B) 1.92.

C) 2.08.

D) 8.33.

26) The difference between the pretax and posttax return to an economic activity is known as the

A) tax multiplier.

B) net tax.

C) tax burden.

D) tax wedge.

27) Suppose you are paid a wage of $50 per hour. if your marginal income tax rate is 20%, then for every additional hour you work, your after-tax wage is

A) $10.

B) $20.

C) $25.

D) $40.

28) Suppose you are paid a wage of $50 per hour. if your marginal income tax rate is 20%, then for every additional hour you work, your tax wedge is

A) $10.

B) $20.

C) $25.

D) $40.

29) Suppose the economy is initially at full employment with real GDP equal to potential GDP. Use the *IS*–*MP* model and the Phillips curve to explain what happens if the economy experiences a recession both with and without automatic stabilizers.