In the Keynesian view, a reduction in the marginal income tax rate would cause
a. output to rise and the price level to fall.
b. both output and the price level to rise.
c. output to rise with the price level unchanged.
d. the price level to rise with output unchanged.
B
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When government outlays exceed tax revenues, the situation is called a budget
A) surplus. B) deficit. C) with a negative balance. D) with no balance. E) debt.
In the above figure, the short-run macroeconomic equilibrium is at the price level ________ and the real GDP level ________
A) 110; $16.5 trillion B) 120; $16 trillion C) 100; $16 trillion D) 110; $16 trillion
If this is a closed economy, the price of a TV will be ________.
A. $75 B. $175 C. $275 D. $125
What are the implications of the quantity theory of money for monetary policy and price stability?
What will be an ideal response?