A reduction in the capital gains tax, often advocated by proponents of supply-side economics, is supposed to stimulate increased
a. consumer spending.
b. net exports.
c. investment spending.
d. government spending.
c
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Refer to the above figure. Suppose that the economy was originally at point A, and then it reached point C by means of a fiscal policy action. Which of the following is correct?
A) Point C is both a short-run equilibrium and a long-run equilibrium that could have been attained through an increase in government spending. B) Point C is a short-run equilibrium that could have been attained through a reduction in government spending, but in the long run the economy will end up at point B. C) Point C is a short-run equilibrium that could have been attained through a tax cut, but in the long run the economy will end up at point B. D) Point C is a long-run equilibrium that could have been attained through a tax increase, although reaching this point first required a short-run equilibrium at point B.
A tariff makes the total economy
A) better off because it increases the domestic production of the good. B) better off because it decreases the deadweight loss from international trade. C) worse off because it creates a deadweight loss. D) worse off because it creates revenue for the government. E) worse off because it decreases both domestic consumer surplus and domestic producer surplus.
The technical term for changing residences is _____________
a. Mobility b. Fertility c. Immigration d. Adaptation
The law of supply states that, other things equal, when the price of a good falls, the quantity supplied falls as well
a. True b. False Indicate whether the statement is true or false