Supply-side tax cuts tend to benefit the rich because tax cuts
a. on income tend to benefit high income earners more than low income earners.
b. on savings benefit high income earners who do most of the personal saving.
c. for capital formation tend to benefit those with the means to accumulate capital.
d. on capital gains tend to benefit those with larger financial assets.
e. All of the above are correct.
e
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The above figure shows a perfectly competitive firm. If the market price is more than $20 per unit, the firm
A) will definitely shut down to minimize its losses. B) will stay open to produce and will make zero economic profit. C) will stay open to produce and will incur an economic loss. D) will stay open to produce and will make an economic profit. E) might shut down but more information is needed about the fixed cost.
The table above gives data for the nation of Pearl, a small island in the South Pacific. If aggregate demand increases so that the quantity of real GDP demanded is $6 billion more at each price level, the new equilibrium real GDP is ________, and the nation is now experiencing a(n) ________.
A) $22 billion; inflationary gap B) $22 billion; recessionary gap C) $28 billion; inflationary gap D) $28 billion; recessionary gap E) $25 billion; equilibrium
When an economy dips into recession, automatic stabilizers will tend to
a. enlarge the budget deficit (or reduce the surplus). b. reduce the budget deficit (or increase the surplus). c. ensure that the budget remains in balance. d. expand the supply of money and, thereby, stimulate aggregate demand.
In an open economy, the supply of loanable funds comes from national saving
a. True b. False Indicate whether the statement is true or false