Consider a Macro Model with a Constant Price Level and Demand-Determined

question 110

Multiple Choice

Consider a macro model with a constant price level and demand-determined output.A rise in the net tax rate ________ the simple multiplier and ________ equilibrium national income.

• A)lowers; has no effect on
• B)lowers; lowers
• C)lowers; raises
• D)raises; raises
• E)raises; has no effect on

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Definitions:

Marketable Securities

Financial instruments that are easily convertible into cash and are often used for short-term investments.

Current Liabilities

Financial obligations due within one year, including accounts payable, short-term loans, and taxes owed.

Average Collection Period

The average number of days it takes for a business to receive payments owed by its customers for sales made on credit.

Balance Sheet

A financial statement that shows a company's financial position, including assets, liabilities, and shareholders' equity at a specific point in time.