A change in tax rates
A) has a larger multiplier effect the smaller the tax rate.
B) has a less complicated effect on GDP than does a tax cut of a fixed amount.
C) will not affect disposable income.
D) will not affect the size of the multiplier.
A
You might also like to view...
Suppose the income-consumption curve for goods X and Y is upward sloping. If the price of good Y increases and the income-consumption curve rotates in clockwise fashion, then we know that:
A) X and Y are complements. B) X and Y are both inferior goods. C) X and Y are substitutes . D) Y is an inferior good.
A decrease in the real risk-free interest rate causes the:
a. Preferred asset ratio for currency in circulation (C/D) to rise, which increases the quantity of real loanable funds supplied. b. Preferred asset ratio for customary reserves (U/D) to rise, which increases the quantity of real loanable funds supplied. c. Preferred asset ratio for near money (N/D) to fall, which decreases the quantity of real loanable funds supplied. e. None of the above.