According to John Maynard Keynes, policy makers should respond to a downturn in the business cycle by:
A. Cutting taxes and increasing government spending.
B. Cutting taxes and reducing government spending.
C. Raising taxes and increasing government spending
D. Raising taxes and reducing government spending
E. Do nothing because government activism violates Keynes' laissez faire approach.
Ans: A. Cutting taxes and increasing government spending.
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If workers and firms can fully anticipate the price change in the economy from a particular policy
A) then the policy will not impact employment levels. B) then the policy will not cause inflation. C) then the policy will be effective at changing employment levels. D) then the policy will be crowded out by the exchange rate.
An increase in a budget deficit financed by borrowing can increase interest rates and reduce investment spending thereby creating lower rates of economic growth
a. True b. False Indicate whether the statement is true or false
The difference in the marginal tax rate paid by the highest earners and the lowest earners in 2018 was ______ percent.
a. 2 b. 10 c. 27 d. 37
Refer to Scenario 9.3 below to answer the question(s) that follow. SCENARIO 9.3: Investors put up $520,000 to construct a building and purchase all equipment for a new restaurant. The investors expect to earn a minimum return of 10 per cent on their investment. The restaurant is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly). Included in the fixed costs is the 10% return to the investors and $1,000 per week in other fixed costs. Variable costs include $1,000 in weekly wages and $600 per week for materials, electricity, etc. The restaurant charges $5 on average per meal. Refer to Scenario 9.3. Economic profit per week is
A. ?$400. B. $0. C. $600. D. $900.