By the end of the 1960s, fiscal activism was falling out of favor due to its long ________ lag and, as predicted by the permanent-income hypothesis, the ________ of the 1968 tax surcharge
A) legislative, ineffectiveness
B) legislative, overstimulation
C) effectiveness, ineffectiveness
D) effectiveness, overstimulation
A
You might also like to view...
A business borrows from a bank at 7 percent but expects 3 percent general inflation in the economy. What are the nominal and real rates of interest facing this borrower?
What will be an ideal response?
When a Mexican resident buys a ukulele from a U.S. producer, there is a(n)
A) increase in the supply of dollars in the foreign exchange market. B) decrease in the supply of dollars in the foreign exchange market. C) increase in the demand for dollars in the foreign exchange market. D) decrease in the demand for dollars in the foreign exchange market.
Total utility can be calculated as the
a. difference between all marginal utilities b. price paid for one good c. sum of all marginal utilities d. total expenditure on all units of the good the consumer buys e. difference between the marginal utilities of the first and last units
The total expenditure schedule in Macroland begins with these initial levels (in billions of dollars): Income = 1,000; Consumption = 900; Investment = 200; Government = 300; Net Exports = ?100. If the MPC = 0.75 and income increases in increments of 200, find the equilibrium level of income. If full employment requires an income level of 2,000, what (if anything) should the government do? Indicate both the direction of the spending change and the size of the spending change.
What will be an ideal response?