One objection to supply-side tax cuts is that demand-side changes
A. are smaller than supply-side changes.
B. and supply-side changes are about equal.
C. are more unpredictable than supply-side changes.
D. are larger than supply-side changes.
Answer: D
You might also like to view...
If potential output equals 8,000 and short-run equilibrium output equals 8,500, there is a(n) ________ gap and the Federal Reserve must ________ real interest rates in order to close the gap.
A. recessionary; not change B. recessionary reduce C. recessionary; raise D. expansionary; raise
The impact of financial markets on the economy comes partly through
A) the substitution effect. B) the wealth effect. C) the international trade effect. D) the travel effect.
Per capita GDP measures both market and nonmarket production
Indicate whether the statement is true or false
Suppose an economist collects the following data between May and December of a given year: gasoline prices rose sharply, consumer incomes remained constant, consumers purchased more fuel efficient vehicles than in the previous year, the size of the population did not change, sales of gasoline decreased by 15 percent. Which of the following theories could be tested with this information?
A. When the price of gasoline rises, gasoline purchases fall. B. When consumer incomes rise, gasoline purchases rise. C. When the population increases, purchases of fuel efficient vehicles increase. D. No economic theory could be tested with this information.