Refer to Figure 3-4. At a price of $15, how many units will be sold?

In the figure above, what would happen to the size of the multiplier if marginal income tax rates were increased?

A) The multiplier would fall in value and might become negative. B) The multiplier would not change in value. C) The multiplier would fall in value but would not become negative. D) The multiplier would rise in value. E) More information is needed to determine the effect on the size of the multiplier.

A cut in marginal tax rates would: a. increase the price level and real GDP in the short run if it has no effect on short-run aggregate supply

b. increase the price level and real GDP in the short run, even if possible aggregate supply effects are included. c. increase real GDP in the short run, but there is an indeterminate effect on the price level if there is no supply-side effect on aggregate supply. d. increase real GDP in the short run, but there is an indeterminate effect on the price level if supply-side effects on aggregate supply are included.