An increase in taxes of a specific amount will have a smaller impact on the equilibrium GDP than will a decline in government spending of the same amount because:
A. the MPC is smaller in the private sector than it is in the public sector.
B. declines in government spending always tend to stimulate private investment.
C. disposable income will fall by some amount smaller than the tax increase.
D. some of the tax increase will be paid out of income that would otherwise have been saved.
D. some of the tax increase will be paid out of income that would otherwise have been saved.
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To enter a local cable television market, a firm needs a license from the city government. This is an example of
A) a natural monopoly. B) the government maintaining consistent standards in the broadcast industry. C) a government-imposed barrier. D) occupational licensing.
The amount of money that someone would pay today for the right to receive a future payment is called
a. the present value of the future payment b. the determinate value of the future payment c. the interest rate d. the principal e. the time discount
If you were to draw the long-run Phillips curve, it would look like a
a. horizontal line b. short-run Phillips curve c. bell-shaped curve d. U-shaped curve e. vertical line
Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed in the table. CustomerReservation Price($/Rental)A22B16C12D8E6F4Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island Bikes charges a different price in the morning and in the afternoon, then what will be the total economic surplus?
A. $9 B. $3 C. $41 D. $49