If Policy Makers Want to Increase Real GDP by $100

question 119

Multiple Choice

If policy makers want to increase real GDP by $100 billion and the marginal propensity to consume is 0.75, they should _____ taxes by _____ .

• A)decrease; more than $25 billion
• B)decrease; less than $25 billion
• C)increase; more than $25 billion
• D)increase; less than $25 billion

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Definitions:

Persuasively Argued

Effectively presented reasoning or argumentation that convincingly supports a particular position or point of view.

Financial Information

Data regarding the financial status of an entity, including assets, liabilities, revenues, expenses, and equity, among other financial metrics.

Verifiable

The ability to be tested and proven to be true or accurate, often through the provision of evidence or demonstration.

Consistent

Referring to a principle in accounting that requires the same accounting methods to be applied in the financial statements period over period.