Use the Following to Answer Questions

question 359

Multiple Choice

Use the following to answer questions :
Scenario: Fiscal Policy
Consider the economy of Arcadia. Its households spend 75% of increases in their income. There are no taxes and no foreign trade. Its currency is the arc. Potential output is 600 billion arcs.
-(Scenario: Fiscal Policy) Look at the scenario Fiscal Policy. Suppose the government decides to tax its citizens. The tax multiplier is:

• A)greater than the government spending multiplier.
• B)less than the government spending multiplier.
• C)zero, because changes in taxes have no effect on aggregate demand.
• D)impossible to determine.

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Definitions:

Parenthood

The role and responsibilities associated with raising a child, from providing emotional support to meeting the child's physical needs.

United States

A country in North America that consists of 50 states and is characterized by a diverse population and a large economy.

First Birth

The event of giving birth for the first time, marking a major transition in the life of a parent, especially the mother.

Consummate Love

A term from Sternberg’s Triangular Theory of Love, describing a complete form of love that combines intimacy, passion, and commitment.