The tax multiplier is equal to the spending multiplier
a. True
b. False
Indicate whether the statement is true or false
False
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The ________ effect of a price change refers to the impact of a change in the price of a good on a consumer's purchasing power
A) income B) substitution C) ceteris paribus D) demographics
The domestic currency price of a representative foreign expenditure basket is
A) P, the domestic price level. B) E, the nominal exchange rate. C) P times E, the domestic price level times the domestic price level. D) P , the foreign price level. E) P times E, the foreign price level times the nominal exchange rate.
Since collective consumption goods have a marginal cost of zero, the efficient price is equal to _____
a. average fixed cost b. average variable cost c. marginal cost d. the market price
Assume the marginal propensity to consume (MPC) is 0.80 and the government increases taxes by $100 billion. The aggregate demand curve will shift to the:
A. left by $80 billion. B. right by $200 billion. C. right by $400 billion. D. left by $400 billion.