The main idea behind supply-side tax cuts is that
a. tax cuts increase spending, which increases aggregate supply.
b. some tax cuts can increase aggregate supply.
c. people like lower taxes and will spend more if they get them.
d. it is easier to shift aggregate supply than aggregate demand.
b
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Social Security was not designed to provide insurance against outliving one's retirement.
A. True B. False C. Uncertain
The argument that an increase in aggregate demand, as a result of an increase in government purchases, will be offset by increases in savings (less current consumer spending) for future taxes is called:
a. the crowding out effect b. the Ricardian equivalence theorem c. the budget deficit effect d. the budget surplus effect
Which of the following is the primary source of cross-country differences in the real earnings of workers?
a. differences in natural resource endowments b. differences in output per worker c. differences in the average number of hours worked d. differences in the share of workers that are members of a labor union e. access to modern technology
Recently, in Smalltown, the price of Twinkies fell from $0.80 to $0.70 . As a result, the quantity demanded of Ho-Ho's decreased from 120 to 100 . What would be the appropriate elasticity to compute? Using the midpoint method, compute this elasticity. What does your answer tell you?