In the basic Keynesian model, a tax cut:
A. increases potential output.
B. reduces potential output.
C. increases short-run equilibrium output.
D. reduces short-run equilibrium output.
Answer: C
You might also like to view...
Consider the United States' production of soy beans and running shoes. If the United States has an absolute advantage in the production of both goods compared to China,
A) only the United States can gain from trade. B) each country will be able to produce at a point beyond its PPF. C) only China can gain from trade. D) only the United States will be able to operate beyond its PPF. E) both countries can gain from trade.
If the exchange rate falls from 120 yen per dollar to 100 yen per dollar, the dollar has ________ and the yen has ________
A) depreciated; appreciated B) appreciated; depreciated C) depreciated; depreciated D) appreciated; appreciated
Which of the following is most likely to be a price taker?
a. a respected heart surgeon b. an ice cream shop owner located in Atlanta, Georgia c. a beachside tourist resort d. a Kansas wheat farmer
Comparative advantage explains how two nations can benefit from trade.
Answer the following statement true (T) or false (F)