The reason that the multiplier is smaller if there are variable taxes is that

A. taxes add to government spending, which increases income.
B. people get angry about taxes and decide to work less.
C. tax increases shift the expenditure line upward.
D. part of an increase in income is taken away in taxes.


Answer: D

Economics

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Consider two economies: A and B. In economy A, the work culture is such that people do not mind working for 12 hours a day. On the contrary, in economy B, people work for a maximum of 6 hours in a day. If the culture hypothesis holds, then:

A) the growth rate in both economies are likely to fluctuate randomly. B) economy A is likely to grow faster than economy B. C) economy B is likely to grow faster than economy A. D) both economies are likely to grow at the same rate.

Economics

Which of the following statements about U.S. international trade in 2013 is CORRECT?

A) The value of U.S. exports exceeded the value of U.S. imports. B) The value of U.S. exports was about 33 percent of the value of total U.S. production. C) The United States imported only goods. D) The United States was the world's largest trader.

Economics

How would each of the following events affect the level of employment and the real wage rate?

(a) A tremendous boom occurs in the stock market, increasing people's wealth by $100 billion overnight. (b) A major government loan-guarantee program goes bust, losing $500 billion. To pay off the loss, the government announces that tax rates will rise 30% in the future. (c) A nuclear mishap contaminates all auto plants in the Detroit area, destroying their capital. (d) Medical science cures the common cold, causing fewer work days lost due to illness, thus greatly increasing labor productivity.

Economics

In recent years, the United States has had a general pattern of a trade ________ when it comes to the balance of trade.

a. deficit b. surplus c. plateau d. stall

Economics