How do induced taxes and needs-tested spending change during a recession? What is the effect of induced taxes and needs-tested spending on the multiplier effects of changes in autonomous expenditure? Induced taxes _______ during a recession. Needs-tested spending _______ during a recession. A. decrease; increase B. increase; decrease C. increase; increase D. decrease; decrease Induced taxes and needs-tested spending _______ the multiplier effects of changes in autonomous expenditure. A. sometimes increase and sometimes decrease B. do not influence C. increase D. decrease

How do induced taxes and needs-tested spending change during a recession? What is the effect of induced taxes and needs-tested spending on the multiplier effects of changes in autonomous expenditure? Induced taxes ___ during a recession. Needs-tested spending _ during a recession. A. decrease; increase B. increase; decrease C. increase; increase D. decrease; decrease Induced taxes and needs-tested spending _____ the multiplier effects of changes in autonomous expenditure. A. sometimes increase and sometimes decrease B. do not influence C. increase D. decrease

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section: Chapter Questions

Problem 1TY

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Question

How do induced taxes and needs-tested spending change during a recession? What is the effect of induced taxes and needs-tested spending on the multiplier effects of changes in autonomous expenditure?

Induced taxes _______ during a recession. Needs-tested spending _______ during a recession.

decrease; increase

increase; decrease

increase; increase

decrease; decrease

Induced taxes and needs-tested spending _______ the multiplier effects of changes in autonomous expenditure.

sometimes increase and sometimes decrease

do not influence

increase

decrease

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