Which of the following is true of the Golden Age of fiscal policy of the 1960s?
a. Fiscal policy was used to prevent output from expanding in 1964
b. Lyndon B. Johnson cut income tax rates to reduce inflationary pressures in the economy
c. A tax cut was introduced to increase savings and unemployment.
d. A tax cut increased disposable income and consumption.
e. The unemployment rate rose by 5 percent for the first time in seven years
d
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The effort curve is
A) horizontal, because work effort is independent of the real wage. B) negatively sloped, because of diminishing marginal returns to labor. C) positively sloped, because of the law of increasing cost. D) S-shaped, because a small increase in the real wage will increase work effort more at an intermediate wage than at a low wage or at a high wage.
Which of the following is a reason that the Fed does not traditionally attempt to limit asset price bubbles?
a. The Fed's actions could do more harm than good. b. It is nearly impossible to determine if a bubble exists before it bursts. c. The Fed's policies cannot be targeted at only one sector of the economy. d. all of the above
When planned spending exceeds output, there is an unplanned inventory investment.
Answer the following statement true (T) or false (F)
In addition to insuring accounts, the FDIC today has the additional power of
A) establishing the discount rate. B) establishing FOMC goals. C) establishing higher capital requirements for banks. D) setting reserve requirements.