The Demand-Side Effect of a Change in Taxes Is Less

question 239

Multiple Choice

The demand-side effect of a change in taxes is less than the same sized change in government expenditure because

• A) the amount by which taxes change is affected by the MPC.
• B) only part of the increase in disposable income from the tax cut is spent.
• C) changes in government expenditure do not directly affect consumption.
• D) tax rates are the same regardless of income levels.

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Definitions:

TCP/IP

Transmission Control Protocol/Internet Protocol, the fundamental suite of protocols that supports the Internet and most local area networks.

Client/server Computing

A model of computing where a client requests services and resources from a centrally located server, facilitating centralized resource management and operations.

Thin Clients

Computing devices that rely on a connection to remote servers for data processing and storage, offering a lightweight, cost-effective alternative to traditional personal computers.

Extranets

Private networks that extend and provide limited access to a company's information to external partners, suppliers, or clients through the internet.