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Author Question: If the tax multiplier is -4 and taxes are reduced by $35 billion, output (Read 33 times)

dakota nelson

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Question 1

Taxes are reduced by $10 billion and income increases by $200 billion. The value of the tax multiplier is


◦ -20.
◦ -5.
◦ -2.
◦ -0.5.

Question 2

If the tax multiplier is -4 and taxes are reduced by $35 billion, output


◦ falls by $8.75 billion.
◦ falls by $140 billion.
◦ increases by $140 billion.
◦ increases by $8.75 billion.


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Marked as best answer by dakota nelson on Apr 19, 2019

SeanoH09

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SeanoH09

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