If the value of a government-taxation multiplier is 1.8, which of the following is likely to be true if all other variables remain unchanged?
A) A $1.80 increase in taxation increases gross domestic product by $1.80.
B) A $1 reduction in taxation increases gross domestic product by $1.80.
C) A $1 increase in taxation increases gross domestic product by $1.80.
D) A $1.80 reduction in taxation increases gross domestic product by $1.80.
B
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When disposable income is zero, consumption expenditure is
A) also zero. B) negative. C) equal to induced consumption expenditure. D) equal to autonomous consumption. E) None of the above answers is correct.
With free trade between the United States and Canada, the United States exports tomatoes and Canada exports maple syrup. U.S. consumers ______
A. of tomatoes gain and Canadian consumers of maple syrup lose B. of both tomatoes and maple syrup gain more than either producer C. of maple syrup gain more than U.S. producers of maple syrup lose D. of tomatoes gain more than U.S. producers of tomatoes lose