When policy makers choose between tax policy and spending policy to affect the level of aggregate demand, they tend to choose on the basis of
A. how large a public sector they want.
B. how much they want to change aggregate demand.
C. how much they want to change aggregate supply.
D. which has the larger multiplier.
Answer: A
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In the above figure, the long-run effect of providing university education at no charge to all qualified applicants would be to shift the curve SH
A) and the curve SL leftward. B) and the curve SL rightward. C) leftward and the curve SL rightward. D) rightward and the curve SL leftward.
In Marx's ideal communist society, the state:
a. actively promotes income incentives. b. follows the doctrine of laissez faire. c. owns resources and conducts planning. d. does not exist.
A company's credit risk can be high even if it is solvent and well-capitalized, if there is:
a. Actually, it is impossible for a solvent, well-capitalized company to have a high credit risk. b. Insufficient cash earnings and/or insufficient access to the credit markets. c. High expected inflation. d. Political and central bank instability in the nation(s) where it operates. e. A high real, risk-free interest rate.
When the Federal government cuts taxes and increases spending to stimulate the economy during a period of recession, such actions are design to be:
A. Passive B. Automatic C. Countercyclical D. Nondiscretionary