The multiplier will be smaller, other things being equal:
a. the smaller the fraction of each dollar earned that goes to taxes
b. the larger the MPC.
c. the smaller the fraction of each dollar of disposable income that goes to saving.
d. None of the above are true.
d
You might also like to view...
When the economy is in long-run equilibrium, the price level adjusts so as to equate which two values with one another?
A) total planned real expenditures and total planned production B) government spending and tax revenues C) the inflation rate and the unemployment rate D) import and export spending
At any quantity, the marginal factor cost is always
A) parallel to the marginal revenue product. B) below the labor supply curve. C) above the labor supply curve. D) above the labor demand curve.
For most products, purchases tend to fall with decreases in buyers' incomes. Such products are known as:
A. Inferior goods B. Direct goods C. Average goods D. Normal goods
Refer to the diagram. At P 4 , this firm will:
A. shut down in the short run.
B. produce 30 units and incur a loss.
C. produce 30 units and earn only a normal profit.
D. produce 10 units and earn only a normal profit.