The Inclusion of a Tax Rate in the Model Results

question 35

Multiple Choice

The inclusion of a tax rate in the model results in a new multiplier that is:

• A)larger than the original multiplier.
• B)the same as the original multiplier if the economy is in a recession.
• C)smaller than the original multiplier.
• D)not affected by automatic stabilizers.

---

Definitions:

Brokers

Intermediaries that facilitate buying and selling of securities, commodities, or other financial instruments on behalf of clients.

Sales

The exchange of goods or services for money, representing the primary source of revenue for most businesses.

Dividend Announcement

is a public declaration by a company of its intention to pay out earnings to its shareholders in the form of dividends.

Signaling Effect

A phenomenon where decisions made by a company send signals to the market about its future prospects or the value of its stock.