Holding Other Factors Constant, If a Tax Increase Moves the Government

question 96

Multiple Choice

Holding other factors constant, if a tax increase moves the government budget from deficit to surplus, then the real interest rate will ________ and the equilibrium quantity of national saving and investment will ________.

• A)increase; increase
• B)decrease; decrease
• C)increase; not change
• D)decrease; increase

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Definitions:

Unhealthy

Describes conditions, habits, or behaviors that are detrimental to one's physical or mental well-being.

Borderline

Borderline often refers to borderline personality disorder (BPD), a mental health condition characterized by unstable moods, behavior, relationships, and self-image.

Unstable

Lacking consistency, predictability or reliability, often used to describe emotional states or chemical compounds.

Manipulation

An action or strategy carefully designed to change a person's behavior or perception in a subtle or overt way.