According to the Keynesian view, if real GDP is slowing and the economy appears to be headed for a recession, a reduction in tax rates is
a. highly appropriate because it will stimulate aggregate demand and, thereby, help to strengthen the economy.
b. highly inappropriate because it will either reduce the size of the budget surplus or increase the size of the deficit.
c. not very important because the "demand stimulus effects" of the tax cut will be largely offset by additional borrowing.
d. not very important because the "demand stimulus effects" of lower current taxes will be largely offset by the expectation of higher taxes in the future.
A
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Assuming the price level has not changed, how would an increase in the aggregate demand affect real GDP?
A) It only changes with changes in exports. B) It increases. C) It only changes with changes in imports. D) It decreases.
Of the following high-income countries, which has the lowest life expectancy at birth?
A) Canada B) Japan C) the United Kingdom D) the United States
In a command economy, the basic economic questions are answered by:
a. central authority. b. individual buyers and sellers. c. the traditional methods. d. none of these.
When there are economies of scope between two products which are separately produced by two firms, merging into a single firm can:
A. lead to a reduction in sales. B. accomplish a reduction in costs. C. lead to an increase in cost. D. accomplish an increase in sales.