Critics of supply-side economics agree that shortly after the Reagan tax cuts were put into place, the economy began to expand. These critics, though, argue that the expansion did not result from the supply-side policies, but rather from
A. the fact that the Federal Reserve dramatically increased the money supply at the same time that the tax cuts became effective.
B. a very large increase in the demand for U.S. exports at the same time that U.S. imports fell dramatically.
C. the self-correcting nature of the economy.
D. the increases in government spending that occurred at the same time the tax cuts became effective.
Answer: A
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Defining money becomes ________ difficult as the pace of financial innovation ________
A) less; quickens B) more; quickens C) more; slows D) more; stops
If the Fed buys a U.S. government bond from a member of the public,
a. the banking system has more reserves and the money supply tends to grow. b. the banking system has less reserves and the money supply tends to grow. c. the banking system has more reserves and the money supply tends to fall. d. the banking system has less reserves and the money supply tends to fall.
Which component of AE (AD) makes the greatest contribution to GDP?
(a) Domestic household expenditure (C). (b) Exports (X). (c) Investment (I). (d) The net expenditure of central and local government (G).
Tax loopholes are equally available to all taxpayers.
Answer the following statement true (T) or false (F)