A Tax Cut Has a Smaller Impact on Aggregate Demand

question 99

Multiple Choice

A tax cut has a smaller impact on aggregate demand than an increase in government purchases of the same size because

• A)A portion of the tax cut is invested.
• B)A portion of the tax cut is saved.
• C)Tax cuts do not increase disposable income.
• D)The tax cut multiplier is equal to 1.

Comprehend the procedure for posting journal entries to ledger accounts.

Distinguish between the different types of special journals.

Understand the concept of control accounts and their relevance to subsidiary ledgers.

Differentiate between transactions that should be recorded in general and special journals.

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Definitions:

Echinoderms

A phylum of marine animals characterized by radial symmetry, a calcareous skeleton, and a complex water vascular system, including starfish, sea urchins, and sea cucumbers.

Arthropods

Invertebrate animals having an exoskeleton, a segmented body, and paired jointed appendages.

Flatworms

A diverse group of invertebrates belonging to the phylum Platyhelminthes, characterized by their flat, soft bodies.

Chelicerates

Arthropod group with specialized feeding structures (chelicerae) and no antennae; arachnids and horseshoe crabs.