If the Government Knew the Precise Values of the Multiplier

question 48

Multiple Choice

If the government knew the precise values of the multiplier and potential income, fine-tuning the economy would:

• A)be possible.
• B)be much easier, but mistakes would still occur occasionally.
• C)still be very difficult.
• D)be more difficult.

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Definitions:

Economy

A system of production, distribution, and consumption of goods and services within a particular geographical region.

Federal Gasoline Tax

A tax imposed by the federal government on the sale of gasoline.

Highway Maintenance

The process of keeping roads in safe and workable condition, including repairs, repaving, and cleaning activities.

U.S. Labor Force

The total number of individuals in the United States who are actively employed or seeking employment.