A complete understanding of tax policy requires knowledge of the principles of equity and efficiency in taxation, as well as awareness of _____

What is the money multiplier?

a) A measure of the potential or maximum amount the money supply can increase when new deposits enter the system. b) A measure of the amount of excess reserves banks hold. c) A measure of the amount of total reserves banks hold. d) A measure of the maximum amount of savings that can happen when account holders deposit money in a bank account.

An increase in our federal government's budget deficit will likely:

a. increase the national debt. b. increase interest rates. c. be less effective in stimulating the economy than the spending multiplier implies because of crowding out. d. decrease borrowing by households and businesses. e. All of the answers are correct.