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It was argued that income taxes and transfers Increased the stability of real GDP in the face of AD and AS shocks. The simple multiplier

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It was argued that income taxes and transfers Increased the stability of real GDP in the face of AD and AS shocks. The simple multiplier is given by the formula below, where t is the rel lax rate (n decimal form), and m is the marginal propensity to import (in decimal form). Simple Multipler = 1-z 1 -[MPC (1 -t) -m] a. The larger the value of the simple multiplier, the the AD curve b. The the AD curve, the less stable real GOP in the presence of AS shocks. G. The the multiplier, the smaller the size of the shift in the AD curve for any given change in autonomous expenditure. d. For any given AS curve, the smaller the shift in AD, the stable is real GDP. a. The economy's automatic stabilizers O A. reduce the size of the multiplier. O B. do not affect the size of the multiplier. O C. Increase the size of the multipler O) D. have an unpredictable effect on the size of the multiplier

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