The tax multiplier equals the change in ________ divided by the change in ________
A) taxes; equilibrium real GDP
B) equilibrium real GDP; taxes
C) taxes; consumption spending
D) consumption spending; taxes
Answer: B
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What are the implications of there being a large number of firms in a monopolistically competitive market?
What will be an ideal response?
The extended least squares assumptions are of interest, because
A) they will often hold in practice. B) if they hold, then OLS is consistent. C) they allow you to study additional theoretical properties of OLS. D) if they hold, we can no longer calculate confidence intervals.
Economist Brown believes that changes in aggregate demand affect only the price level, and economist Black believes that changes in aggregate demand affect only Real GDP. What does the aggregate supply (AS) curve look like for each economist?
A) For economist Brown the AS curve is vertical and for economist Black the AS curve is horizontal. B) For economist Brown the AS curve is horizontal and for economist Black the AS curve is vertical. C) For economist Brown the AS curve is upward sloping and for economist Black the AS curve is downward sloping. D) For economist Brown the AS curve is downward sloping and for economist Black the AS curve is upward sloping.
In the year _______ the stock market crashed, while the economy went into a major economic decline which lasted until the year ________.
Fill in the blank(s) with the appropriate word(s).