An income tax distorts the choice between work and leisure.

If buyers compete against sellers, then

A) buyers would be worse off as more sellers enter the market. B) buyers would be better off with fewer sellers in the market. C) sellers would be worse off with more buyers for their products. D) sellers would be better off with fewer buyers of their products. E) all the above are true.

If an increase in investment spending of $20 million results in a $200 million increase in equilibrium real GDP, then

A) the multiplier is 0.1. B) the multiplier is 1. C) the multiplier is 10. D) the multiplier is 100.