In contrast to changes in government spending, tax changes affect spending
A. directly.
B. in the same proportion.
C. by a greater amount.
D. indirectly.
Answer: D
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Refer to the information. The introduction of $80 billion of government spending would:
The following information is for a closed economy:
A. lower the multiplier from 2.5 to 2.0.
B. increase the multiplier from 2.5 to 3.0.
C. increase the multiplier from 2.0 to 2.5.
D. have no effect on the size of the multiplier.
A headline reads "Gasoline Prices Are Higher." A likely explanation for this event would be a(n):
a. Decrease in the supply of gasoline and an increase in the demand for gasoline b. Increase in the supply of gasoline and a decrease in the demand for gasoline c. Increase in the demand for and the supply of gasoline d. Decrease in the demand for and the supply of gasoline