A Decrease in the Value of the Simple Multiplier Can

question 120

Multiple Choice

A decrease in the value of the simple multiplier can be caused by

• A)a decrease in the net tax rate.
• B)a decrease in the marginal propensity to import.
• C)an increase in the marginal propensity to consume.
• D)an increase in the marginal propensity to save.
• E)an increase in the marginal propensity to spend.

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Definitions:

Levied

Imposed or collected, usually referring to taxes, duties, or other charges by an authority.

Demand Curve

A chart that illustrates the connection between a product's cost and the amount of the product customers are prepared to buy at different price levels.

Equilibrium Quantity

The amount of products or services available and sought at the balance price, where the supplied quantity matches the demanded quantity.

Tax Revenue

The revenue collected by governments via taxes, which is allocated to finance public services and meet governmental duties.