A tax multiplier equal to ?4.30 would imply that a $100 tax increase would lead to a:
A. $430 decline in real GDP.
B. $430 increase in real GDP.
C. 4.3 percent increase in real GDP.
D. 4.3 percent decrease in real GDP.
Answer: A
You might also like to view...
Trade restrictions imposed in the name of national security have been recommended by protectionists in order to:
a. develop strong defense-related industries. b. avoid dependence on foreign suppliers during wartime. c. reduce the necessity of stockpiling strategic supplies. d. all of these.
Compared to a perfectly competitive industry, a monopoly produces a smaller output and charges a higher price.
Answer the following statement true (T) or false (F)
If the government levies a $5 tax per ticket on buyers of NFL game tickets, then the price paid by buyers of NFL game tickets would
a. increase by less than $5. b. increase by exactly $5. c. increase by more than $5. d. decrease by an indeterminate amount.
Which of the following is an example of a focal point equilibrium?
A. Purchase of fast food because it is cheap and convenient B. Avoidance of cheap computers because low price indicates low quality C. Purchase of hip-hugger pants because pop stars wear them D. Purchase of an expensive automobile no one else owns to impress others