A decrease in taxes
a. increases GDP as much as a decrease in government purchases
b. increases GDP less than an equal increase in government purchases
c. decreases GDP more than an equal decrease in government purchases
d. changes GDP but in an unpredictable way because some people consume more than others and others save more than some
e. increases consumption but has no effect on GDP
B
You might also like to view...
The term "derived demand" refers to
A) a firm's estimated demand curve derived from sales data. B) the demand for a factor of production that is derived from the demand for the good the factor produces. C) the demand for financial products called derivatives. D) a demand curve that derives from the availability of resources.
The discussion of Figure 2.2 in the text indicates that quantity demanded for most goods tends to increase as income rises. However, the quantity of bananas demanded in the U.S. tends to decrease as income rises
Under this condition, we expect that an increase in consumer income shifts the demand curve for bananas: A) rightward B) no shift. C) leftward. D) upward.
Refer to the above table. Suppose the demand for smartphones rises because more people use the Internet with a smartphone. The new equilibrium price will be
A) $200. B) $275. C) more than $275. D) impossible to be determined given the information.
All of the following are major factors limiting economic growth in developing countries EXCEPT
A) dead capital. B) deregulation. C) inefficient government regulation. D) corruption.