One way to describe the tax multiplier is that it equals the
a. the spending multiplier
b. the negative of the spending multiplier minus1.0
c. the GNP gap minus the GDP gap
d. the reciprocal of the marginal propensity to consume
e. the best estimate of the optimal tax rate
B
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In the summer 2012 the lobster catch in Maine was especially large, but instead of celebrating the fisherman were suffering from a lower total revenue. (Source: New York Times, July 28, 2012 ) As the lobster catch increases, there is
A) a movement along the demand curve, resulting in a higher price and a decreased quantity. B) a movement along the demand curve, resulting in a lower price and an increased quantity. C) no change in either the price or the quantity. D) a movement along the demand curve, resulting in a higher price and an increased quantity.
During periods of high inflation, people want to hold as much money as possible
a. True b. False Indicate whether the statement is true or false