The government decides to reduce its expenditure by $250. The multiplier in this economy is 4 and the tax rate is 22 percent. The net effect of this contractionary fiscal policy is to:

In the real economy, income taxes are generally proportional or progressive

What will be an ideal response?

If the market price is lower than a perfectly competitive firm's average total cost, the firm will

A) immediately shut down. B) continue to produce if the price exceeds the average fixed cost. C) continue to produce if the price exceeds the average variable cost. D) shut down if the price exceeds the average fixed cost. E) shut down if the price is less than the average fixed cost.