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.


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.

Economics

You might also like to view...

If a household has a husband, wife, and two kids, has a standard deduction of $12,600, has itemized deductions of $6,650, and personal exemptions of $16,000 (4*$4,000), then the first ________ of income is federal income tax free.

A. $20,650 B. $28,600 C. $13,250 D. $34,250

Economics

A decrease in the expected level of inflation will cause short-run aggregate supply to ____ and the short-run Phillips curve to ____

a. shift left; shift right b. shift left; shift left c. shift right; shift right d. shift right; shift left

Economics

The principal reason that monetary policy has lags is that it takes a long time for

a. changes in the interest rate to change aggregate demand. b. changes in the money supply to change interest rates. c. the Fed to make changes in policy. d. Congress and the President to approve Fed policy.

Economics

The owner or owners control the day-to-day activities of which of the following types of business?

A) corporations and partnerships B) partnerships and sole proprietorships C) sole proprietorships and corporations D) only corporations

Economics