The effect of a decline in taxes on the level of income will differ somewhat from an increase in government expenditures of the same amount because:
A. Tax declines tend to be more expansionary
B. Households may not spend all of an increase in disposable income
C. The MPC which applies to the incomes of households always exceeds the MPC which
applies to business incomes
D. The multiplier is high when the MPS is low
B. Households may not spend all of an increase in disposable income
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Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D2 and S1 (point C). Which of the following changes would cause the equilibrium to change to point B?
A) a positive change in the technology used to produce apples and decrease in the price of oranges, a substitute for apples B) an increase in the wages of apple workers and an increase in the price of oranges, a substitute for apples C) an increase in the number of apple producers and a decrease in the number of apple trees as a result of disease D) a decrease in the wages of apple workers and an increase in the price of oranges, a substitute for apples
Refer to Table 19-11. Nominal GDP for Tyrovia in 2016 equals
A) $1,140. B) $880. C) $690. D) $560.
Suppose a currency's value in the foreign exchange market is determined solely by market supply and demand without any intervention by the government authority, the currency has
A) a fixed exchange rate. B) a gold standard. C) a price control in its exchange rate. D) a floating exchange rate.
If a water-slide park opens to the public in your neighborhood and an admission fee is charged, then the park is a
a. public good b. private good c. good that everyone wants d. nonrival good e. nonexclusive good