Multiple Choice
A reduction in the net tax rate might lead to an increase in the growth rate of potential output if
A) households are not forward looking.
B) the tax cuts stimulate private investment.
C) firms are operating at their normal capacity.
D) the marginal propensity to consume is large.
E) the simple multiplier is large.
Correct Answer:
Verified
Correct Answer:
Verified
Q2: A common assumption among macroeconomists is that
Q3: If the short- run macroeconomic equilibrium occurs
Q4: Which of the following statements about fiscal
Q5: An economy may not quickly and automatically
Q6: A common assumption among macroeconomists is that
Q8: In the long run, aggregate demand is
Q9: Consider a simple macro model with demand-
Q10: The Phillips curve describes the relationship between<br>A)inflation
Q11: Following any AD or AS shock, economists
Q12: Which of the following statements about output