Over long periods of time, the growth rates of actual and potential GDP have been

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.

Richard receives government transfer payments and currently consumes 5 guns and 6 goose livers. Assume the price of guns decreases by 10% and the price of goose liver increases by 20%

The government raises Richard's transfer payments so he can still afford 5 guns and 6 goose livers. Does this constitute a true cost-of-living adjustment (COLA)? A) No. Richard is overcompensated. B) No. Richard is undercompensated. C) Yes. The payment just achieves the right level of compensation. D) Not enough information.