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Which of the following statements about the income-expenditure must be true? Ceteris-Paribus, 1) The tax multiplier for a closed economy will be larger, the higher
Which of the following statements about the income-expenditure must be true? Ceteris-Paribus,
1) The tax multiplier for a closed economy will be larger, the higher is the marginal tax rate.
2) An increase in the marginal tax rate causes the PAE curve to become steeper.
3) The balanced budget multiplier is equal to one.
4) The multiplier for an open economy with a non-negative marginal propensity to import cannot be larger than for a closed economy.
5) An increase in the marginal propensity to save will increase the size of the multiplier.
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