In Which of the Following Situations Would the Multiplier Effect

question 33

Multiple Choice

In which of the following situations would the multiplier effect on a country's economy of a tax cut implemented by that country's government be greatest?

• A) The country is very open to international trade and imports are high relative to GDP.
• B) The country's citizens are affluent and tend to save a relatively high proportion of their income.
• C) The country's citizens have relatively low incomes and spend little on foreign holidays or imported goods.
• D) The country's citizens are cautious and sceptical, leading them to assume that the tax cut will soon be reversed.

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Definitions:

Shape Attitudes

To influence or determine the way individuals feel or think about something.

Performance Expectations

Standards and objectives set by employers or managers that employees are expected to achieve in their roles.

Heroes

Individuals admired for their courage, outstanding achievements, or noble qualities, often serving as inspirational figures.

Observable Culture

The visible and detectable layers of an organization’s culture, such as rituals, dress codes, and physical layout, which can give insights into deeper cultural values.