A Decrease in Taxes Will Have No Effect on Real

question 136

Multiple Choice

A decrease in taxes will have no effect on real GDP if

• A)people look at changes in taxes only in the present.
• B)there is no crowding out.
• C)the Ricardian equivalence theorem holds.
• D)the tax decrease is offset by an increase in government spending.

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Definitions:

Population Variances

A statistical measure that represents the dispersion or spread of a set of data points in a population.

Profit Margin

A financial ratio, often expressed as a percentage, that compares a company's net income to its sales. It reveals how much profit a company makes for each dollar of its sales.

Sample Variances

The measure of spread within a sample dataset, calculated as the sum of squared deviations from the sample mean divided by the number of observations minus one.

Equal-variance T-test

A statistical method used to determine if there is a significant difference between the means of two groups which are assumed to have the same variance.