Net Tax Revenues That Rise with National Income Act as an Automatic

question 66

Multiple Choice

Net tax revenues that rise with national income act as an automatic stabilizer by ________ the marginal propensity to spend and thereby causing the simple multiplier to ________.

• A)increasing; increase
• B)increasing; decrease
• C)decreasing; equal one
• D)decreasing; decrease
• E)decreasing; increase

---

Definitions:

Freshwater

Refers to water bodies like lakes, rivers, and ponds that have low salt concentrations compared to seawater.

Scarce

In short supply; a resource is scarce when there is not enough of the resource available to satisfy all the various ways a society wants to use it.

Physical Capital

The tangible assets that are used in the production of goods and services, including buildings, machinery, and equipment.

Dinner

The main meal of the day, traditionally eaten in the evening.