The main purpose of the Laffer curve is to crudely suggest
A. how government can increase tax revenues by increasing tax rates.
B. that a tax cut will lead to an increase in GDP.
C. the disincentive effects of high marginal tax rates.
D. the tax rate which will yield maximum revenue for the government.
C. the disincentive effects of high marginal tax rates.
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A contractionary policy can be thought of as: a. a decrease in the money supply b. an increase in the money supply c. an increase in the interest rate
d. either (a) or (c).
Suppose the rate of inflation rate is two percent and the nominal interest rate is five percent. According to the Fisher Effect, an increase in the inflation rate to six percent should cause the nominal interest rate to increase from five percent to _____ in the long run
Fill in the blank(s) with correct word
Consumption of fixed capital (depreciation) can be determined by:
a) adding taxes on production and imports to NDP. b) subtracting NDP from GDP. c) subtracting net investment from GDP. d) adding net investment to gross investment.
A fall in the price of a good increases the real income or purchasing power of consumers so that they are able to buy more of the product. This statement best describes:
A) the income effect. B) a complementary good. C) the substitution effect. D) an inferior good.