Contractionary fiscal policy would be most effective in decreasing inflation when
a. the marginal propensity to consume low.
b. investment spending is insensitive to interest rates.
c. the economy has a high marginal tax rate.
d. investment spending is sensitive to interest rates.
b
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The Lorenz curve in the above figure implies that
A) income is equally distributed. B) the lowest fifth of households account for less than 20 percent of income. C) the highest fifth of households account for less than 20 percent of income. D) the lowest fifth of households account for more than 20 percent of income.
Why do markets tend to underproduce public goods?
In reality, there is not one labor market, but many.
Answer the following statement true (T) or false (F)
Explain how the economy moves back to full employment from recession. Be sure to detail what happens to short-run aggregate supply, unemployment, equilibrium GDP and the price level
What will be an ideal response?