A decrease in taxes
a. increases GDP as much as a decrease in government purchases
b. increases GDP less than an equal increase in government purchases
c. decreases GDP more than an equal decrease in government purchases
d. changes GDP but in an unpredictable way because some people consume more than others and others save more than some
e. increases consumption but has no effect on GDP
B
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The marginal social benefit from the production of the last unit of a good is $4,800. If the willingness to pay for that unit is $3,900, what is the external benefit from its production?
A) $900 B) $8,700 C) $3,800 D) $4,100
If the market price in a perfectly competitive market is less than a firm's minimum average variable cost, then the firm's total revenue will always ________
A) exceed its total fixed cost B) be less than its total economic loss C) equal its total cost D) be less than its total variable cost