Other things equal, the multiplier effect associated with a change in government spending is:
A. the same as that associated with a change in taxes.
B. equal to that associated with a change in investment or consumption.
C. less than that associated with a change in investment.
D. greater than that associated with a change in investment.
B. equal to that associated with a change in investment or consumption.
You might also like to view...
Roger spends all of his money on racquetballs and food. What would happen to Roger's budget line if his income increased by 10 percent, holding prices constant?
a. It would shift inward. b. It would rotate about the axis for food. c. It would rotate about the axis for racquetballs. d. Nothing would happen to the budget line, because the relative prices for food and racquetballs have not changed. e. It would shift outward.
The statement "the rich get richer and the poor get poorer" is evident in the fact that
a. the earnings gap between high-skill jobs and low-skill jobs has increased over the last several years. b. developing countries do not pay workers the value of their marginal product. c. developed economies export high-skill jobs to developing countries. d. All of the above are correct.