If the absolute value of the tax multiplier equals 1.6, real GDP is $13 trillion, and potential real GDP is $13.4 trillion, then taxes would need to be cut by ________ to restore the economy to potential real GDP
A) $250 billion
B) $400 billion
C) $640 billion
D) None of the above are correct. Taxes should be increased in this case.
A
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Suppose the exchange rate in the year 2010 was 4 yuan per dollar and in 2011 the exchange rate fell to 3 yuan per dollar
If the price of a Chinese sweater was 120 yuan in both years, the new dollar price in 2011 would be ________ and imports of Chinese sweaters would ________. A) $30; increase B) $40; increase C) $40; decrease D) $30; decrease E) $40; stay the same because the price stayed the same at 120 yuan
In settings where the policy space is single dimensional, non-single peaked preferences by some implies there is no Condorcet winner.
Answer the following statement true (T) or false (F)
A high-wage country cannot afford free trade with a low-wage country. The high- wage country will either be undersold or its workers will be forced to accept lower living standards
a. True b. False
The belief that interest rates are the critical policy lever is associated with
A. Monetarists. B. New classical economists. C. Supply-siders. D. Modern Keynesians.