The marginal tax rate is the change in the average tax rate as income increases.
Answer the following statement true (T) or false (F)
False
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Steps in the transmission of monetary policy are
A) Congress increases the budget deficit, which increases the money supply, which increases aggregate supply. B) Congress increases the money supply, which lowers the interest rate, and leads to an increase in aggregate demand. C) the Federal Reserve lowers the federal funds rate, which lowers the real interest rate, and leads to an increase in aggregate demand. D) the Federal Reserve increases government expenditures on goods and services, leading to an increase in aggregate demand. E) Congress increases government expenditures on goods and services, leading to an increase in aggregate demand.
The Federal Reserve can increase aggregate demand by:
a. Increasing taxes b. Buying government securities in the open market c. Raising the reserve requirement d. Raising the discount rate
Refer to the graph.
The economy begins at a level of output of $20 billion and experiences a one-year recession in which output declines by 4 percent. What is output in year 1?
A. $800 billion B. $19.2 million C. $800 million D. $19.2 billion
An inverse relationship occurs between two variables when as one goes:
A. up the other does not change. B. up the other goes down. C. up the other goes up. D. down the other goes down.