When Income Taxes Are Included in the Basic Macroeconomic Model

question 106

Multiple Choice

When income taxes are included in the basic macroeconomic model, the value of the

• A)inflationary effect is increased.
• B)multiplier is increased.
• C)multiplier is decreased.
• D)expenditure function is increased.

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Definitions:

Battle of Bunker Hill

A significant early battle of the American Revolutionary War, fought near Boston in 1775, known for the high British casualties and the famous order, "Don't fire until you see the whites of their eyes."

Royal Governor

The representative of a monarch in colonial territories, responsible for governing in the interest of the crown.

Dunmore

Refers to Lord Dunmore's Proclamation of 1775, where the British colonial governor of Virginia promised freedom to slaves who left their Patriot masters to fight for the British.

Continental Army

The revolutionary war army, authorized by the Continental Congress in 1775, led by General George Washington, that fought against British forces during the American Revolutionary War.