Which of the following represent expansionary fiscal policy?
A) an increase in marginal individual income tax rates
B) an increase in average individual income tax rates
C) a cut in corporate income tax rates
D) a reduction in government spending
C
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To reach the maximum money multiplier, it is assumed that
A) there is insufficient loan demand. B) all loans get redeposited in a checkable account. C) loans are diverted into circulating currency. D) commercial banks keep the amount of reserves. equal to total bank deposits.
Increasing marginal returns to labor might occur at low levels of labor input because of
A) increasing average costs. B) differing factor proportions. C) increasing specialization of tasks. D) decreasing use of machinery and increasing use of technology.
Countries with larger debts in terms of absolute value are worse off than countries with smaller debts.
Answer the following statement true (T) or false (F)
Market power leads to market failure when it results in
A. Normal economic profits. B. Lower market prices. C. The demise of the industry. D. Decreased market output.