A change in tax rates
A) has a less complicated effect on GDP than does a tax cut of a fixed amount.
B) has a larger multiplier effect the smaller the tax rate.
C) will not affect disposable income.
D) will not affect the size of the multiplier.
Answer: B
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Real GDP fluctuates from year to year but is always below potential GDP
Indicate whether the statement is true or false
If a government enacts a price floor on agricultural products to protect wheat farmers, the result is likely going to be
a. an increase in price with a surplus of wheat. b. an increase in price with a shortage of wheat. c. a decrease in price with a surplus of wheat. d. a decrease in price with a shortage of wheat.
Freely functioning markets in the real world always result in efficient allocations of resources.
Answer the following statement true (T) or false (F)
Refer to the table. A merger between Firm 1 in Alpha and Firm 2 in Delta would be a:
Answer the question on the basis of the following table showing market shares of firms in hypothetical industries. Assume these are distinct industries with no buyer-seller relationships or competition among them.
A. vertical merger.
B. horizontal merger.
C. conglomerate merger.
D. diagonal merger.