[Solved] If the Tax Multiplier Is -1

Question 130
Multiple Choice
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If the tax multiplier is -1.5 and a $20 billion tax increase is implemented, what is the change in GDP, holding everything else constant? (Assume the price level stays constant.)


A)a $30 billion decrease in GDP
B)a $30 billion increase in GDP
C)a $300 billion increase in GDP
D)a $13.33 billion decrease in GDP
E)a $13.33 billion increase in GDP

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