A Tax Cut Will Have a Greater Effect on Equilibrium

question 132

Multiple Choice

A tax cut will have a greater effect on equilibrium GDP if the

• A)marginal propensity to consume is smaller.
• B)marginal propensity to save is smaller.
• C)marginal propensity to save is larger.
• D)average propensity to consume is larger.

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Definitions:

Segregation of Duties

A risk management and control strategy that divides tasks among different people to reduce the risk of fraud or error.

Cash Register

A cash register is a mechanical or electronic device for registering and calculating transactions at a point of sale, equipped with a drawer for storing cash.

Independent Internal Verification

The audit process within an organization where transactions and processes are reviewed by a person not involved in their execution, aimed at enhancing accuracy and reliability.

Reconciling Bank Statement

The process of ensuring the amounts on a bank statement match the corresponding amounts in a company's financial records.