Answer the following statement(s) true (T) or false (F)

1. The recession of 1973-75 provides an example of the workings of the automatic stabilizers.
2. According to supply-side economics, a reduction in marginal tax rates causes increases in productivity.
3. Supply-side advocates overestimate the effects of tax cuts on aggregate demand.
4. A decrease in national saving necessarily results in an equivalent decline in investment.
5. Federal borrowing can contribute to an upward pressure on the interest rate.


1. T
2. T
3. F
4. F
5. T

Political Science

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