A Tax Increase Has

question 112

Multiple Choice

A tax increase has

• A)a multiplier effect but not a crowding out effect
• B)a crowding out effect but not a multiplier effect
• C)both a crowding out and multiplier effect
• D)neither a multiplier or crowding out effect

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Definitions:

Operating Activities

Business activities directly related to the production and delivery of goods and services, impacting the operating income.

Direct Method

The direct method is a way of preparing the cash flow statement that involves listing all the major operating cash receipts and payments during the period, showing the net cash provided by operating activities.

Operating Expenses

Recurring expenses incurred through normal business operations, such as rent, utilities, and payroll, excluding COGS.

Cash Payments

Transactions that involve the direct transfer of money to settle obligations, including expenses, debts, or purchases, without the use of credit.