A Decrease in Net Taxes

question 131

Multiple Choice

A decrease in net taxes:

• A)increases GDP as much as an equal decrease in government purchases.
• B)increases GDP less than an equal increase in government purchases.
• C)decreases GDP more than an equal decrease in government purchases.
• D)changes GDP in an unpredictable manner.
• E)has no effect on GDP.

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Definitions:

Cash Payment

Cash payment refers to transactions where the payment for goods or services is made immediately using physical currency or through electronic means that represent immediate funds transfer.

Merchandise Return

Occurs when a customer returns a product to the seller for a refund or exchange due to dissatisfaction or defects.

Perpetual Inventory System

An inventory management system that tracks the sale and restock of inventory items in real-time.

Merchandise

Products that are purchased, stored, and sold by businesses, typically in the retail industry.