A Change in Tax Rates

question 144

Multiple Choice

A change in tax rates

• A) has a less complicated effect on GDP than a tax cut of a fixed amount.
• B) has a larger multiplier effect the smaller the tax rate.
• C) will not affect disposable income.
• D) will not affect the size of the multiplier.

---

Definitions:

Every Customer

Refers to each individual or entity that purchases goods or services from a business or market.

Minimum Wage

The lowest legal hourly pay for workers, established by law or contract.

Labor Demanded

The total quantity of workers that employers are willing and able to hire at a given wage rate within a specific period, reflecting the hiring needs of firms.

Demand D1

A term that might be used in economic models or discussions to refer specifically to a particular demand curve or demand scenario.