Explain the basic arguments for supply-side economics.
What will be an ideal response?
The basic tenet of supply-side economics is that macroeconomic policies have focused on aggregate demand while ignoring the impact of those policies on aggregate supply. Supply-seeders contend that changes in aggregate supply are just as active a force in determining employment and price levels as are changes in aggregate demand. In particular, they argue that high marginal tax rates, public transfer programs, and overregulation have caused the aggregate-supply curve to shift leftward while the aggregate-demand curve is being shifted rightward.
You might also like to view...
TFC=Total Fixed CostQ=Quantity of OutputMC=Marginal CostP=Product PriceTVC=Total Variable Cost Refer to the above information. Total cost is:
A. 
.
B. TFC + TVC.
C. the change in marginal cost.
D. TVC - TFC.
Consumption expenditure is 15,000, government purchases are 5,000, planned investment spending is 4,000 and net exports are 1,500. If total output is 25,000, then unplanned inventory investment is ________
A) negative 500 B) 2,500 C) 3,500 D) 4,000 E) negative 450
If, at the full employment level of income, the amount that businesses plan to invest is greater than the amount that consumers plan to save, then
a. there will be an inflationary gap. b. there will be a deflationary gap. c. total demand will fall short of potential GDP. d. the economy will suffer from increasing unemployment.
For a large country, replacing imports with domestic goods can result in
A. a more efficient allocation of resources based on comparative advantage. B. improvement in the country's terms of trade. C. a decrease in the price of its exports. D. an increase in the world price of its imports.