Economics 12. If the tax multiplier is -6 and taxes are reduced by $100 billion, output:(A) falls by $100 billion. (B) falls by $600 billion. (C) increases by $600 billion.(D) increases by $100 billion.

1. Identify the Tax Multiplier:You are given that the tax multiplier is -6. Remember, a negative tax…

Answered: 12. If the tax multiplier is -6 and…

Brief Principles of Macroeconomics (MindTap Course List)

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ISBN:9781337091985

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Chapter18: Six Debates Over Macroeconomic Policy

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14. If the tax multiplier is -6 and taxes are reduced by $100 billion, output:(A) falls by $100 billion. (B) falls by $600 billion. (C) increases by $600 billion.(D) increases by $100 billion.
11. Taxes are reduced by $50 billion and income increases by $1,000 billion. The value of the tax multiplier is: (A)-4. (B) -20. (C) -10. (D) -5.
Suppose that the economy is in a recession as a result of a fall in investment spending and real GDP is below potential GDP. (a) Illustrate this on an aggregate demand in ation diagram. (b) When real GDP falls, what happens to tax revenue, government spending, and the budget balance? (c) If a balanced budget amendment were in place, what would have to happen to government spending and/or taxes? Illustrate on the diagram. (d) Is it wise to allow the government to run a de cit during a recession and a surplus during an expansion?
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1. Which branch of the federal government must approve a budget? executive state governments legislative O judicial
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A proportional tax is a tax for which people with lower incomes Group of answer choices A. pay a higher percentage of their incomes in tax than do people with higher incomes. B. pay a lower percentage of their incomes in tax than do people with higher incomes. C. pay the same percentage of their incomes in tax as do people with higher incomes. D. pay the same amount of taxes as people with higher incomes pay.

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12. If the tax multiplier is -6 and taxes are reduced by $100 billion, output: (A) falls by $100 billion. (B) falls by $600 billion. (C) increases by $600 billion. (D) increases by $100 billion.