A tax multiplier equal to ?4.30 would imply that a $100 tax increase would lead to a:
a. $430 decline in real GDP.
b. $430 increase in real GDP.
c. 4.3 percent increase in real GDP.
d. 4.3 percent decrease in real GDP.
e. 43 percent decrease in real GDP.
a
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In a competitive market for a private good with no price or quantity regulations, no external cost nor external benefit, low transactions costs, and no taxes or subsidies,
A) the allocation of resources is planned by the government. B) production is organized by government organizations. C) efficiency can be attained in the market with no government intervention. D) efficiency is usually be achieved by majority rule. E) efficiency is generally obtained by using a command system.
A characteristic of monopolistic competition is that each firm
A) faces perfectly elastic demand. B) faces a downward-sloping demand curve. C) has a perfectly elastic supply. D) has a perfectly inelastic supply.