A cut in the income tax rate ________ the tax wedge and ________ employment, saving, and investment
A) decreases; increases
B) increases; increases
C) does not change; increases
D) decreases; does not change
E) increases; decreases
A
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The growth rate in potential GDP is equal to the growth rate in the population.
Answer the following statement true (T) or false (F)
According to the monetarists
A. the supply of money changes in response to changes in the levels of real output and prices. B. changes in the velocity of money are more important than changes in the money supply in causing the level of economic activity to change. C. an expansionary fiscal policy will lower interest rates and thereby tend to over stimulate investment and consumption. D. changes in the money supply are the primary cause of changes in the price level.
The Keynesian model agrees with monetarists and new classical models about the fact that
a. changes in the money supply drive most changes in aggregate demand. b. aggregate supply is upward sloping because of differences between actual and expected price levels. c. changes in aggregate demand drive business cycles. d. Both b and c e. None of the above
The short-run supply of land at a specific location is: a. best described by an upward-sloping curve. b. best described by a downward-sloping curve. c. perfectly inelastic
d. perfectly elastic.