Suppose That a $4 Billion Increase in Government Spending Increases

question 24

Multiple Choice

Suppose that a $4 billion increase in government spending increases Real GDP by $60 billion,and that a $3 billion tax reduction increases Real GDP by $68 billion.In this situation,the tax multiplier is _______________ the government spending multiplier.

• A) less than
• B) greater than
• C) equal to
• D) none of the above

---

Definitions:

Legal Guidelines

Standards and rules established by legislation that guide behavior and business practices.

Discretionary Responsibilities

Responsibilities that allow individuals or managers to make decisions based on their judgment and assessment of a situation.

Corporate Social Responsibility

A business practice that involves participating in initiatives that benefit society, emphasizing ethical behavior, sustainable operations, and community development.

Ethical Responsibilities

Obligations to act in a morally sound way, considering the well-being of others and the environment in decision-making processes.