The tax multiplier is
A. the MPC multiplied by the MPS.
B. the difference in taxes multiplied by the change in the equilibrium level of output.
C. the ratio of the change in the equilibrium level of output to the change in taxes.
D. the ratio of the change in taxes to the change in the equilibrium level of output.
Answer: C
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A change in a nonprice factor of demand will cause:
A. a movement along the demand curve. B. a shift of the demand curve. C. the demand curve to rotate inward. D. the demand curve to rotate outward.
Which of the following groups have no promise of any payment from the corporate firm?
a. the banks who have loaned the company money b. the common stockholders c. the preferred stockholders d. the managers e. the bondholders
Oligopolistic firms engage in collusion to:
A. minimize unit costs of production. B. realize allocative efficiency, that is, the P = MC level of output. C. earn greater profits. D. increase production.
Some proponents of trade sanctions argue for changes in policy because they fear low standards will be used to capture markets and foreign investment. While theoretically possible, there is little or no support for the view that countries use low labor standards this way, because
A) countries with low labor standards generally have trouble attracting foreign investment. B) low standards can change a country's comparative advantage. C) it is impossible to lower labor standards. D) countries would not have an incentive to have low standards.