"Tax cuts, by providing incentives to work, save, and invest, will raise employment and lower the price level." This argument is made by the:
a. Keynesian economists.
b. supply-side economists.
c. classical economists.
d. monetarists.
b
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Which of the following statements correctly differentiates between unemployed workers and discouraged workers?
A) Unemployed workers refer to the skilled workers who have been laid off, while discouraged workers refer to the unskilled workers who have lost their jobs. B) Unemployed workers are counted in the labor force, but discouraged workers are excluded from the labor force. C) Unemployed workers do not have a paid job, while discouraged workers have a paid job. D) The unemployment benefits received by unemployed workers are not capped, while the unemployment benefits received by discouraged workers are capped at a maximum.
To correct for positive externalities the government
A) should allow the price system to do the correction. B) can impose a tax. C) can give a subsidy. D) should create a public good.
When answering this question, assume individuals consider only the short-run effects of changes in future variables when forming expectations of future output and future interest rates. Suppose policy makers announce a reduction in future government spending. Which of the following will occur as a result of this expected reduction in government spending?
A) a reduction in the expected future interest rate and no change in expected future output B) a reduction in the expected future interest rate and an increase in expected future output C) a reduction in the expected future interest rate and an ambiguous effect on expected future output D) none of the above
The United States is an example of
A) a customs union. B) a free trade area. C) an economic union. D) a common market.