If Congress adjusted the U.S. tax system so that the MPC was reduced, the:
A. economy would become more inflation prone.
B. economy would become less stable.
C. stability of the economy would be unaffected.
D. economy would become more stable.
D. economy would become more stable.
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Which of the following will cause an increase in aggregate supply?
A) decreased competition B) an increase in the price level C) an increase in marginal tax rates D) a decrease in input prices
Sally would only agree to a second date with Andy if she sees him leave a generous tip for the waiter on their first dinner date. This is an example of a
a. Screening mechanism b. Signaling mechanism c. Way to waste money d. None of the above
Assume that foreign capital flows from a nation increase due to political uncertainly and increased risk. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to real GDP and the monetary base in the context of the Three-Sector-Model? a. Real GDP rises and monetary base rises
b. Real GDP rises and monetary base falls. c. Real GDP and monetary base fall. d. Real GDP and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Using the concept of the budget constraint and indifference curves, explain how a consumer maximizes total utility.
What will be an ideal response?