Federal budget deficits are often increased by supply-side policies because of their reliance on
a. income tax cuts.
b. income tax increases.
c. increased government spending.
d. decreased government spending.
a
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An outside lag is the time period it takes economists to formulate a stabilization policy
Indicate whether the statement is true or false
Suppose that opportunity costs are constant and that Fred can either bake a maximum of six pies or three cakes in a day. Ethel can either produce a maximum of eight pies or two cakes in a day. Fred's opportunity cost to produce one cake is
A) one-half pie. B) two pies. C) six pies. D) four pies.
Consumers demand different features from cough medications taken for daytime use versus nighttime use. Drug companies conveniently package both medications together. This strategy is designed to
a. Allow consumers to buy the two together b. Stop consumers from buying each medicine separately c. Make the consumers more homogenous so that maximum consumer surplus can be extracted with a single price d. None of the above
A customer of Bank A writes a $20,000 check for a new car, which the car dealer deposits in his bank, Bank B. Which of the following statements pertaining to this transaction is most true?
A. Neither Bank A's nor B's reserves will change B. Banks A's reserves will decrease by the required reserve rate times $20,000 and Banks B's reserves will increase by (1- required reserve rate) times $20,000 C. Bank B's reserves will decrease and Bank A's reserves will increase by $20,000 D. Bank A's reserves decrease by $20,000 and Bank B's reserves increase by $20,000