Tax cuts on business income ________ aggregate demand
A) would decrease
B) would increase
C) would not change
D) may increase or decrease
Answer: B
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When faced with an economic loss, a competitive firm will shut down its operations in the short run
a. True b. False Indicate whether the statement is true or false
Excludability matters because it:
A. allows owners to set an enforceable price on a good. B. allows consumers to control the price of a good. C. creates a perceived scarcity that allows the seller to keep the price artificially high. D. creates a perceived scarcity that causes buyers to have an inelastic demand for the good.
Everything else being equal, a higher interest rate
a. increases consumption spending as people face increasing debt b. reduces consumption spending as people have a greater incentive to save c. does not change consumption spending because consumption is only affected by income d. does not change total consumption spending, but does change who does the spending e. reduces both consumption spending and saving as people face increased debt
The law of diminishing marginal returns explains why a marginal revenue product schedule
A. first declines and then increases. B. is always negative. C. eventually declines. D. eventually increases.