All of the following are instruments of fiscal policy except
A) rebate on payroll taxes.
B) education tax credits.
C) unemployment insurance benefits.
D) an interest rate cut.
Ans: D) an interest rate cut.
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In which of the following situations will market clearing price decrease and the equilibrium quantity increase?
A) an increase in demand with no change in supply B) an increase in supply with no change in demand C) a decrease in supply with no change in demand D) a decrease in demand with no change in supply
Creative destruction refers to
A) the destruction of the government system which limits economic growth. B) the movement from an agricultural society to a service economy. C) the mechanism for establishing property rights. D) the creation of new jobs and economic growth after destroying old jobs.
Which of the following statements best describes the changes in federal spending of the US economy from 1939 to 1949?
a. Between 1939 and 1944 military expenditures increased substantially and civilian-related expenditures remained about the same. b. Between 1939 and 1944 both military and civilian-related expenditures increased substantially. c. Between 1939 and 1944 the production possibilities frontier for military and civilian-related expenditures shifted out. d. Between 1944 and 1949 military expenditures decreased substantially and civilian-related expenditures returned to 1939 levels.
Two events occur simultaneously in the market for automobiles: (1) an improvement in assembly line technology and (2) the economy enters a recession (which decreases consumers' income). An economist would predict with certainty that
a. equilibrium quantity will rise b. equilibrium quantity will fall c. equilibrium price will rise d. equilibrium price will fall e. the equilibrium price will remain the same