The Reason That the Multiplier Is Smaller If There Are

question 23

Multiple Choice

The reason that the multiplier is smaller if there are variable taxes is that

• A)taxes add to government spending, which increases income.
• B)people get angry about taxes and decide to work less.
• C)tax increases shift the expenditure line upward.
• D)part of an increase in income is taken away in taxes.

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Definitions:

Price Elasticity of Demand

A gauge for understanding how sensitive the demand for a product is to price changes.

Comprehensive Environmental Response

An extensive approach or policy aimed at addressing and remedying environmental pollution and hazards, often referring to legislation like the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

Hazardous Waste

Waste materials that are dangerous or potentially harmful to human health or the environment.

Disposal Sites

Locations designated for the disposal or treatment of waste materials.