A Cut in Tax Rates Affects Equilibrium Real GDP Through

question 79

Multiple Choice

A cut in tax rates affects equilibrium real GDP through two channels: ________ disposable income and consumer spending, and ________ the size of the multiplier effect.

• A)decreasing; increasing
• B)decreasing; decreasing
• C)increasing; increasing
• D)increasing; decreasing

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Definitions:

Contagion

The spread of an idea, emotion, or behavior from person to person through contact or communication.

Ontogeny

The development and growth of an organism from fertilization to maturity, focusing on physiological, physical, and behavioral changes.

Sex-Stereotypical Differences

Sex-stereotypical differences refer to the commonly held beliefs or perceptions about the differing characteristics, abilities, and behaviors of males and females based on societal stereotypes.

Highly Context Dependent

This term refers to phenomena or behaviors that vary significantly according to the specific circumstances or context in which they occur, implying that outcomes are not fixed but change with the situation.