Which of the following would a Keynesian macro model include to describe the effect of a tax cut?
A. Multiplier spending responses.
B. Interest rate rises.
C. Labor supply and production responses.
D. A positive relationship between interest rates and investment.
Answer: A
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If the cost of labor increases, the isocost line will
A) stay the same. B) shift outward in parallel fashion. C) rotate inward around the point where only capital is employed in production. D) shift inward in parallel fashion.
If the average total cost curve is falling, what is necessarily true of the marginal cost curve? If the average total cost curve is rising, what is necessarily true of the marginal cost curve?
The highest valued alternative option that must be given up in order to choose an action is called its
a. utility.
b. opportunity cost.
c. capital.
d. ceteris paribus
To ensure that the fundamental identity of national income accounting holds, changes in inventories are
A. counted as consumption. B. treated as part of expenditure. C. ignored. D. treated as part of saving.