Which of the Following Is True

question 130

Multiple Choice

Which of the following is true?

• A)​The tax multiplier is smaller than the government spending multiplier.
• B)​The government cannot stimulate consumer spending through tax cuts.
• C)​The government spending multiplier is smaller than the tax multiplier.
• D)​The government can stimulate consumer spending through decreases in transfer payments.

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Definitions:

Sales Tax

A tax levied by a government on the sale of goods and services, collected by the retailer at the point of sale and passed on to the government.

Merchandise

Goods that are purchased for resale at a profit.

Asset Account

An account that records all financial transactions related to a company's assets, including current and fixed assets.

Credit Customer

A customer who purchases goods or services on credit, paying for them at a later date.