If the tax multiplier is -4 and taxes are reduced by $35 billion, output1.falls by $140 billion.2.increases by $140 billion.

The data presented in the question above is:- Tax multiplier = -4 Reduction in taxes = $35 billion…

Answered: If the tax multiplier is -4 and taxes…

If the tax multiplier is -4 and taxes are reduced by $35 billion, output falls by $140 billion. increases by $140 billion. 1. 2.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

If the tax multiplier is -4 and taxes are reduced by $35 billion, output
1.
falls by $140 billion.
2.
increases by $140 billion.

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