An increase in the marginal tax rate
A) decreases the expenditure multiplier but cannot make it negative.
B) has no effect on the expenditure multiplier.
C) can either increase or decrease the expenditure multiplier.
D) increases the expenditure multiplier.
E) decreases the expenditure multiplier and can make it negative.
A
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The Federal Open Market Committee of the Federal Reserve System is responsible for
A) maintaining competition among the nation's commercial banks. B) determining monetary policy actions. C) establishing the official price of gold. D) defining the foreign exchange value of the dollar.
A leveraged buyout is
A) a form of short-term lending to finance companies when they buy a company. B) the acquisition of a company financed by debt. C) the sale of commercial paper to finance purchases of bundles of securitized non-traded loans. D) borrowing by finance companies to make loans.
An increase in the overall price level that continues over a significant period of time is
A. high inflation. B. sustained recovery. C. super inflation. D. sustained inflation.
Related to the Economics in Practice on page 318: A company selling iced tea discovers that as sugar is added to tea, customers' opinions of the taste of the tea rises for the first few grams of sugar and then drops. Even so, the company chooses not to add the amount sugar that would result in the best-tasting tea. Which of the following would explain why adding less sugar could be a wise decision?
A. Many products in the cold drink market are sold with substitutes for sugar, such as high fructose corn syrup. B. Manufacturers of tea are required to clearly indicate the amount of sugar in their products. C. The price of sugar added to tea is much less significant than the price of other ingredients, such as tea leaves. D. Teas with less sugar are more likely to appeal to health-conscious consumers.