An increase in personal income tax rates will cause a(n):
a. Increase in the quantity of real domestic output demanded
b. Decrease in the quantity of real domestic output demanded
c. Decrease in aggregate demand
d. Increase in aggregate demand
c. Decrease in aggregate demand
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If the Federal Reserve lowers its target inflation rate, the monetary policy reaction function ________ and the aggregate demand curve ________.
A. shifts downward to the right; shifts to the left B. shifts downward to the right; shifts to the right C. shifts upward to the left; shifts to the left D. shifts upward to the left; shifts to the right
If the market was a monopoly, the quantity would be ________ and the price would be ________; if the market tis perfectly competitive, the quantity would be ________ and the price would be ________
A) Q1; P1; Q2; P2 B) Q2; P1; Q1; P2 C) Q1; P1; Q2; P1 D) Q1; P2; Q2; P1 E) Q1; P2; Q1; P1
What the economist calls externalities create social problems
A) because opportunity costs are low when people live close to one another. B) only when the externalities are negative spillovers. C) partly because people have a limited ability to empathize. D) when people know about all the consequences of their behavior.
In the Keynesian DMP model
A) There is a fiscal multiplier. B) The government post vacancies in the labor market. C) There is no unemployment. D) There can be more than one wage consistent with equilibrium.