If full-employment income and equilibrium income are equal for a country, then a tax cut will result in
A. Leakages exceeding injections.
B. Output exceeding desired expenditure.
C. Excess AD.
D. Undesired inventory accumulation.
Answer: C
You might also like to view...
The Federal Reserve System controls the money supply by ________.
A. making loans to private borrowers B. changing the amount of reserves the banking system has available C. making loans to the Treasury D. issuing currency
In 2010, in order to stimulate capital investment, President Obama proposed
a. a reduction in real interest rates. b. an increase in the money supply. c. increased write-offs for businesses purchasing equipment. d. an increase in the tax on capital gains.
Say the economy is at its potential income at $8 trillion and the deficit is $200 billion. The structural deficit:
A. is $200 billion. B. could be more than $200 billion. C. could be less than $200 billion. D. cannot be determined from the given information.
If Libby can produce 20 gallons of beer or 5 gallons of wine per hour, her opportunity cost of one gallon of beer is 4 gallons of wine.
Answer the following statement true (T) or false (F)