A reduction in direct taxes will result in:
A) an increase in output and a little inflation if the economy is near full employment
B) a decrease in inflation and a small increase in output if the economy is near full employment
C) a leftward shift in the AD curve
D) no shift in the AD curve of these
Correct Answer:
Verified
Q46: According to the Ricardian equivalence theory, what
Q47: Assume there is no crowding-out effect.If an
Q48: According to classical macroeconomic theory, an increase
Q49: A rise in the inflation target by
Q50: An increase in Australia's marginal propensity to
Q52: If the economy is in a recession,
Q53: The government reduces taxes by $20 million.Suppose
Q54: Which of the following is an automatic
Q55: Suppose government purchases increase by $100 billion,
Q56: In the short run:
A)price level is fixed
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents