Author Question: The introduction of a tax by the government will: a. have no effect on real GDP since real GDP ... (Read 27 times)

biggirl4568 · **on:** Jun 30, 2018

The introduction of a tax by the government will:
a. have no effect on real GDP since real GDP comprises consumption expenditure, investment expenditure, and government expenditure.
b. affect consumption through a change in disposable income.
c. affect consumption through its effect on investment.
d. affect government spending since the government levies the tax.
e. increase real GDP since it enables the government to increase spending.

Question 2

The vertical distance between the average total cost curve and the average variable cost curve at any given output level equals average fixed cost at that particular output level.
a. True
b. False
Indicate whether the statement is true or false