If federal taxes are cut by $10 billion, aggregate demand
A) increases by $10 billion.
B) increases by $10 billion multiplied by the government expenditure multiplier.
C) increases by $10 billion multiplied by the tax multiplier.
D) decreases by $10 billion.
E) decreases by $10 billion multiplied by the tax multiplier.
C
You might also like to view...
Society's demand curve for a public good:
a. is given by the horizontal summation of individual demand curves. b. is given by the vertical summation of individual demand curves. c. cannot be derived from individual demand curves due to the nature of a public good. d. is given by the average citizen's individual demand curve.
If the CPI was 104 in 1967 and is 390 today, then $10 in 1967 purchased the same amount of goods and services as
a. $2.67 purchases today. b. $37.50 purchases today. c. $39.00 purchases today. d. $104.00 purchases today.