The Simple Multiplier Applies

question 60

Multiple Choice

The simple multiplier applies:

• A)only when an inflationary gap exists.
• B)to shifts in the consumption and investment schedules.
• C)only to shifts in the investment schedule.
• D)only to shifts in the consumption schedule.

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Definitions:

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (taxable income or spending), expressed as a percentage.

Total Taxes

The comprehensive amount of taxes paid by an individual or entity, encompassing federal, state, and local taxes.

Individual Income Tax

A tax levied on the income of individuals or households by the government.

Proportional Tax

A tax system where the tax rate remains constant regardless of the amount subject to taxation.