As a general rule, when an income tax is added to the basic macroeconomic model, what happens to the consumption schedule?
a. It will shift downward.
b. It will shift upward.
c. It will become flatter.
d. It will become steeper.
c
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Which of the components of total planned autonomous spending has a negative multiplier, and one which is lower in absolute value than the multiplier of the others?
A) autonomous consumption B) net taxes C) planned investment D) government expenditure E) net exports
To diversify, a homeowner with a variable-rate mortgage should choose investments that
a. pay higher returns when interest rates rise and lower returns when interest rates fall. b. pay lower returns when interest rates rise and higher returns when interest rates fall. c. provide a higher return than the market average. d. provide a lower return than the market average.