When comparing tax and spending policy by the government, in general we note that the tax policy multiplier effect relative to the spending multiplier should be:

A. larger.
B. smaller.
C. equivalent.
D. not comparable.


C. equivalent.

Economics

You might also like to view...

Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen asĀ 

A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting upward C. Short-run aggregate supply shifting downward D. Aggregate demand shifting leftward

Economics

Normative statements are statements about

A) prices. B) quantities. C) what is. D) what ought to be.

Economics

Suppose the president is successful in passing a $5 billion tax increase. Assume that taxes are fixed, the economy is closed, and the marginal propensity to consume is 0.75. What happens to equilibrium GDP?

A) There is a $20 billion decrease in equilibrium GDP. B) There is a $15 billion decrease in equilibrium GDP. C) There is a $15 billion increase in equilibrium GDP. D) There is a $20 billion increase in equilibrium GDP.

Economics

Two goods are substitutes when

A) an increase in the price of one reduces the demand for the other. B) an increase in the price of one raises the demand for the other. C) the two goods are used together. D) the two goods have the same price.

Economics