According to the standard textbook Keynesian analysis, which is greater: the tax multiplier or the government spending multiplier? Explain the reasoning behind this relationship
The standard textbook Keynesian analysis asserts that the government spending multiplier is larger than the tax multiplier. The reasoning is that when government spends $1, the entire $1 enters the spending stream. However, when government cuts taxes by $1, individuals spend a portion of the dollar and they save a portion of it. Therefore, a $1 tax cut will lead to less than a $1 increase in the spending stream.
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One basic difference between "land" and "capital" resources is that land is
A. a gift of nature, while capital is manufactured. B. manufactured, while capital is a gift of nature. C. unlimited, while capital is limited. D. limited, while capital is unlimited.
U.S. reserve requirements
A) are rejected by half the banks operating in the United States. B) show how regulatory asymmetries can operate to enhance the profitability of Eurocurrency trading. C) tend to harm the bank's business and decrease monetary aggregates. D) force banks to hold a portion of its assets in a liquid form easily mobilized to meet sudden deposit outflows. E) remain in place, but capital requirements have begin defaulting.
The share of the labor force that was unionized increased from 7.4 percent in 1930 to more than 30 percent in 1955 . During these 25 years, the share of national income allocated to labor (in contrast to capital)
a. increased approximately 10 percent. b. increased 17.6 percent. c. fell 20 percent. d. was virtually unchanged.
Ceteris paribus, if the French decide they want to drink more Chinese-grown tea, this causes the ________ Chinese currency to ________.
A. supply of; decrease B. demand for; increase C. demand for; decrease D. supply of; increase