Why might tax cuts be more appropriate than increasing government expenditures to counter recessions? Is there any evidence for this thinking?
Tax cuts affect aggregate demand quickly and consumers and business are likely to use the tax cut to purchase what they need most. Government expenditures might not be spent wisely or quickly since spending is determined by the political process. Tax cuts may also have incentive effects leading to greater labor supply and greater spending on investment. Tax cuts proposed by President Kennedy and by President Reagan were followed by periods of robust growth.
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When a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,
a. this is an indication that the world price of soybeans exceeds the nation's domestic price of soybeans in the absence of trade. b. this is an indication that the nation has a comparative advantage in producing soybeans. c. the nation's consumers of soybeans become worse off and the nation's producers of soybeans become better off. d. All of the above are correct.
Variables X and Y are independent of each other. If we plot X on the horizontal axis and Y on the vertical axis, the line that connects combinations of X and Y in a two-variable diagram is
A) parallel to the horizontal axis. B) downward-sloping (left to right). C) parallel to the vertical axis. D) upward-sloping (left to right). E) a or c
Losses
What will be an ideal response?
Most of the income earned by professional athletes and major celebrities can be classified as _________.
Fill in the blank(s) with the appropriate word(s).