The tax multiplier is equal
What will be an ideal response?What will be an ideal response?
to ?Y/?×T = -(mult)(mpc). Mathematically, (mult)(mpc) always works out to exactly 1.0 less than the regular multiplier. (You can use the multiplier formula from Chapter 9 to work out why this is true.) Using the figures from our previous example, where mpc = 0.8 and mult = 5, the tax multiplier would be -(0.8) 3 5 = -4. (For a more detailed algebraic account of the tax multiplier for a lump sum tax, see Appendix A1.) (chapter 10 page 233)
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The Federal Reserve responded to the 2008 financial crisis in several ways. Which of the following is not one of the ways the Fed responded?
A) The Fed made investment banks eligible for discount loans. B) The Fed lowered the required reserve ratio on demand deposit accounts in order to increase the amount of bank reserves. C) The Fed helped JP Morgan to acquire Bear Stearns, a nearly bankrupt investment bank. D) The Fed lent investment banks Treasury securities in exchange for mortgage-backed securities.
A firm will practice price discrimination when it believes that by doing so it will be able to increase total
A) sales. B) revenue. C) profits. D) production.