What determines the size of a shift in aggregate demand that results from a personal income tax cut?

A. The marginal propensity to consume
B. The size and permanence of the tax cut
C. The level of consumer confidence
D. All of these statements affect the size of such a shift.


D. All of these statements affect the size of such a shift.

Economics

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A liquidity trap occurs when the

a. LM curve is steep. b. LM curve is vertical. c. LM curve is relatively flat. d. IS curve is flat.

Economics

Figure (a) represents the domestic demand and supply of televisions. Suppose free trade is allowed and the current world price of televisions is P1 as shown in Figure (b). As a result of free trade the domestically produced quantity would



a. fall to Q1.
b. rise to Q2.
c. fall to Q3.
d. rise to Q4.

Economics

Use the graph to help determine which one of the following statements regarding unemployment and business cycles is true.?

A. The unemployment rate usually continues to rise even after the recession has ended.
B. The unemployment rate fell right after the end of the recession in November 2001.
C. The unemployment rate was not affected by the recession in November 2001.
D. The unemployment rate fell right the beginning of the recession in November 2001.

Economics

Creative destruction is:

A. the process by which large firms buy up small firms. B. the process by which new firms and new products replace existing dominant firms and products. C. a term coined many years ago by Adam Smith. D. applicable to planned economies but not to market economies.

Economics