If the Absolute Value of the Tax Multiplier Equals 1

question 299

Multiple Choice

If the absolute value of the tax multiplier equals 1.6,real GDP is $13 trillion,and potential real GDP is $13.4 trillion,then taxes would need to be cut by ________ to restore the economy to potential real GDP.

• A)$250 billion
• B)$400 billion
• C)$640 billion
• D)None of the above are correct.Taxes should be increased in this case.

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Immune System

The body's defense mechanism against pathogens, comprising various organs, tissues, and cells.

Grass Pollen

Microscopic grains released by grasses for the purpose of fertilization, often a common allergen for many people.

Allergen

A substance that can cause an allergic reaction in individuals who are sensitive to it, ranging from mild to severe responses.

Transducing Chemicals

Substances that convert external signals into internal messages within the body, often involved in sensory processes.