• Card 112 / 145: The multiplier concept is important because it shows
    A) why decreases in the tax rate may actually increase tax revenues overall.
    B) why fiscal policy is always effective.
    C) how small changes in government spending may have large impacts on overall output.
    D) how changes in taxes are multiplied into larger government revenues.

    Answer:
    C) how small changes in government spending may have large impacts on overall output.

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Macroeconomics MCQ

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