When planned spending exceeds output, there is an unplanned inventory investment.
Answer the following statement true (T) or false (F)
False
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The magnitude of the tax multiplier is smaller than the magnitude of the government expenditure multiplier because
A) a change in taxes does not change expenditures. B) an increase in taxes decreases expenditures. C) a decrease in government expenditure decreases tax revenue. D) a change in taxes does not change expenditures by as much as the same size change in government expenditure. E) a change in taxes creates additional induced taxes.
Legislators often gain by bundling a number of projects benefiting local districts at the expense of general taxpayers together on a single bill. Such legislation is called
a. market failure legislation. b. the rational-ignorance effect. c. public-goods legislation. d. pork-barrel legislation.
Using the growth accounting equation, if the growth rate of technology is 3%, the growth of labor is 2% and the growth of capital is 1% then if ?=0.25 then growth of output can be estimated to be:
A. 6.00%. B. 4.00%. C. 4.75%. D. 4.25%.
Planned investment must equal actual investment for
A. the MPC to equal the MPS. B. consumption to equal saving. C. the economy to be in equilibrium. D. saving to equal income.