When the economy has an income tax that is variable, the multiplier is
A)unchanged.
B)larger.
C)smaller.
D)unpredictable.

Name: When the economy has an income tax that is variable, the multiplier is A)unchanged. B)larger. C)smaller. D)unpredictable.
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Question

Quizplus · Accepted Answer

When the income tax is variable, the multiplier is smaller because the tax reduces the amount of disposable income that individuals have available to spend or invest, which decreases the overall impact of any government stimulus or investment.

When the Economy Has an Income Tax That Is Variable