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Loraine Loraine
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9 years ago
If the government uses fiscal policy to close a recessionary gap, government
A) expenditure must be increased by more than the gap because of the government expenditure multiplier.
B) taxes must be cut by more than the gap because of the tax multiplier.
C) expenditure can be increased by less than the gap because of the government expenditure multiplier.
D) taxes can be raised by less than the gap because of the tax multiplier.
E) taxes must be raised by more than the gap because of the tax multiplier.
Textbook 
Essential Foundations of Economics

Essential Foundations of Economics


Edition: 7th
Authors:
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Start by doing what's necessary; then do what's possible; and suddenly you are doing the impossible.
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SydnieSydnie
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9 years ago
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9 years ago
I was confident with my answer, glad it was correct.

Oh, and thumbs-up are more than welcome Slight Smile
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