The Tax Multiplier Is Most Likely to Be Larger Than

question 77

Multiple Choice

The tax multiplier is most likely to be larger than the expenditure multiplier when ________.

• A)monetary policy is at the zero lower bound
• B)rising inflation causes the real interest rate to decline
• C)when the change in tax revenue is large relative to the change in government purchases
• D)the expansionary fiscal policy is expected to be followed by higher taxes

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Definitions:

Heterosexual Married Couples

Pairs of opposite-sex partners who are legally married to each other.

Eros

In John Lee’s typology of love, the love of beauty.

Passionately

With intense, strong feelings or emotions, often used to describe romantic or sexual feelings.