Supply-side economics would include such policies as
A. open-market operations in which the Fed sold its supply of bonds.
B. raising government spending to stimulate the multiplier effect.
C. cutting marginal income tax rates.
D. erecting tariff barriers to protect American jobs.
C. cutting marginal income tax rates.
You might also like to view...
If a competitive firm’s short-run average cost curve lies above the price of the product, we can conclude that the firm
A. is earning a huge profit. B. is incurring losses. C. is earning zero economic profits. D. is earning a normal profit.
Which of the following statements best describes an effect of tax cuts?
a. When the economy is doing extremely well, tax cuts may shift AD so far to the right as to generate inflationary pressures, with little gain to GDP. b. When the economy is doing extremely well, tax cuts may shift AD so far to the right as to generate inflationary pressures, with considerable gain to GDP. c. When the economy is doing extremely well, tax cuts may shift AD so far to the left as to generate inflationary pressures, with little gain to GDP. d. When the economy is doing extremely well, tax cuts may shift AD so far to the left as to generate inflationary pressures, with considerable gain to GDP.
In Figure 13-3, demand curve CAD represents a market in which oligopolists will match the price changes of rivals and demand curve EAB represents a market in which oligopolists will ignore the price changes of rivals. According to the kinked demand model, the relevant demand curve will be
A. demand curve CAB. B. demand curve CAD. C. demand curve EAD. D. demand curve EAB.
Suppose the Fed increases the money supply. As a result of this, people deposit excess funds into their bank accounts, causing banks to have excess reserves. As a result, the banks lower the interest rates that they charge on loans, and investment rises, causing an increase in aggregate spending. This is known as a(n)
A. indirect effect of monetary policy. B. direct effect of monetary policy. C. indirect effect of fiscal policy. D. direct effect of fiscal policy.