Econ Unit 6 FA Dummy 2, 2025-26

What term refers to the factor by which a change in tax collections changes real GDP?

• Budget Multiplier

• Tax Multiplier

• Price Multiplier

• Output Gap Ratio

The tax multiplier is best defined as:

• The total value of new taxes collected during a fiscal year

• The factor by which a change in tax collections changes real GDP

• The rate at which inflation affects tax revenue

• The percentage of income that is saved

Which of the following measures how changes in taxation influence the level of real GDP?

• Consumption Multiplier

• Interest Rate Effect

• Tax Multiplier

• Investment Ratio

A value that estimates how much real GDP will change in response to a change in taxes is called the:

• Demand Multiplier

• Supply Index

• Tax Multiplier

• Inflation Factor

The term for the concept that connects a shift in tax policy to a resulting shift in GDP is the:

• Government Spending Lag

• Tax Multiplier

• Deflation Adjuster

• Fiscal Neutrality Ratio

Which term matches the following definition: “the factor by which a change in tax collections changes real GDP”?

• Price Level Index

• Tax Multiplier

• Recession Buffer

• National Savings Rate

A study finds that a $200 million decrease in taxes results in a $600 million increase in real GDP. What economic concept is demonstrated here?

• Deficit Expansion Effect

• Tax Multiplier

• Wage-Price Spiral

• Savings Leakage Model

Suppose an economy has a marginal propensity to consume of 0.75, and the government reduces taxes. Which concept will predict the resulting increase in real GDP?

• Balanced Budget Multiplier

• Tax Multiplier

• Price Elasticity of Demand

• Investment Accelerator

A policymaker proposes cutting taxes by $500 million, estimating it will grow GDP by $1.2 billion. Which multiplier supports this estimate?

• Interest Rate Multiplier

• Tax Multiplier

• Real Wage Multiplier

• Net Export Effect

A simulation shows that a $100 tax increase lowers GDP by $250. Which multiplier value is being applied in this case?

• 2.5 Tax Multiplier

• 0.4 Government Multiplier

• 3.0 Investment Multiplier

• 1.5 Price Flexibility Factor