In a booming economy, fiscal policy automatically becomes:
A. contractionary as tax rates rise and welfare payments fall.
B. expansionary as tax rates rise and welfare payments fall.
C. contractionary as tax rates fall and welfare payments rise.
D. expansionary as tax rates fall and welfare payments rise.
A. contractionary as tax rates rise and welfare payments fall.
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A higher price reduces the quantity of a product demanded because
A. the purchasing power of individuals increases. B. individuals will buy more of the product and less of its substitutes. C. the financial assets of individuals increase. D. individuals will buy less of the product and more of its substitutes.
To implement the Friedman rule for long-term monetary policy, the monetary authority would need to set the
A) inflation rate equal to zero. B) nominal rate of interest equal to zero. C) real rate of interest equal to zero. D) money growth rate equal to zero.
Which of the following explains the slope of the demand curve for labor?
a. the marginal productivity theory b. the law of diminishing marginal product c. the practice of featherbedding d. the result of monopsony
Which is considered to be an economic resource by economists?
a. Rent b. Money c. Labor d. Wages