According to Laffer (of the Laffer curve), the Kemp-Roth tax cut of 1981 should have caused
a. tax revenue to rise, and it did
b. tax revenue to fall, and it did
c. people to increase saving, and it did
d. people to increase consumption spending, but it didn't
e. tax revenue to rise, but it didn't
E
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The property of transitivity explains why indifference curves
A. cannot cross. B. bow-outward. C. are concave. D. slope upward.
When there is a recession (a fall in output) and prices are increasing, and this situation is caused by adverse supply shocks, the term economists use to describe it is
A) stagflation. B) inflation. C) aggregate shifts. D) stagnation.
Moral hazard is a problem in providing deposit insurance because insured banks are
A) more likely to make bookkeeping errors. B) overly cautious due to extra regulations adopted by the FDIC. C) more likely to provide bank managers with lavish perquisites. D) encouraged to take on more risk.
An incentive is a
A) need. B) want. C) reward for desired behavior. D) resource.