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. The Neverland increases the income tax rate so that tax revenues increase by $40 million. In responses, consumption falls by $16 million. If GDP
. The Neverland increases the income tax rate so that tax revenues increase by $40 million. In responses, consumption falls by $16 million. If GDP and government spending remains the same and the Neverland is a closed economy, what is the change in investment? a. Investment increases by $16 million. b. Investment decreased by $16 million. c. Investment increases by $24 million. d. Investment decreases by $56 million.
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