As the tax rate increases, the absolute value of the tax multiplier
A. increases.
B. does not change.
C. decreases.
D. could either increase or decrease depending on the value of the MPC.
Answer: C
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The biggest problem caused by a deflation is that
A) prices fall. B) wages fall. C) interest rates rise. D) people cannot repay their debts.
Why do we subtract import spending from total expenditures?
What will be an ideal response?
An increase in expected inflation will shift the short-run Phillips Curve
Indicate whether the statement is true or false
Jennifer is the only employee of her sole proprietorship. She is entertaining the idea of hiring an additional employee. She knows that on her own she can produce 100 units per day
Jennifer figures that Applicant A will help her produce 175 units per day whereas Applicant B will help her produce 155 units per day. Which of the following statements is most accurate? A) Applicant B has a marginal product of 75 units. B) Applicant B has an average product of 77.5 units. C) Applicant A has a marginal product of 75 units. D) Applicant A has an average product of 87.5 units.