The Figure Above Shows Two Aggregate Expenditure Lines

question 47

Multiple Choice

The figure above shows two aggregate expenditure lines.
-In the figure above, what would happen to the size of the multiplier if marginal income tax rates were increased?

• A) The multiplier would fall in value and might become negative.
• B) The multiplier would fall in value but would not become negative.
• C) The multiplier would rise in value.
• D) The multiplier would not change in value.
• E) More information is needed to determine the effect on the size of the multiplier.

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Definitions:

°

A symbol denoting degrees, used to measure angles, temperature, or denote the order of a polynomial or differential equation but is not a key term by itself. NO.

Parallelogram Method

A method of determining vector angles.

Vectors

Physical quantities defined by both magnitude and direction, such as displacement, velocity, and acceleration, often represented graphically by arrows.

Magnitude

The size, length, or amount of something, often measured in mathematical terms.