f the following would constitute a supply-side economic policy for raising employment? a) decreasing social security benefits b) decreasing the money supply c) increasing corporate and perso
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Which of the following would constitute a supply-side economic policy for raising employment?
a) decreasing social security benefits
b) decreasing the money supply
c) increasing corporate and personal
d) increasing government spending aimed at exploiting the multiplier effect
Step by step
Solved in 2 steps
- Average Tax Rate Tax Revenue ($B) 20% $250 40 300 60 250 80 200 Refer to the table. If the current tax rate is 60 percent, supply-side economists would advocate Multiple Choice lowering tax rates to 20 percent, or lower if possible. lowering tax rates to 40 percent. keeping tax rates at 60 percent. raising tax rates to 80 percent.Compare the impact of a recession that reduces consumer income by 10 percent on the consumption of durable goods and house rentals. Suppose that the income elasticity of demand for durable goods is 1.5 and the income elasticity of demand for house rentals is 0.3. Based on your response, make a policy argument to support through government funding either businesses or house rentals.Discuss the three main supply-side policies that the government can use to reduceunemployment?
- A decrease in the full-employment budget surplus will Multiple Choice a) consumption b) decrease saving c) increase national income d) decrease national income e) decrease investmentQuestion 26 Explain and analyse the alternative supply side policies available to a government AND evaluate the view that supply side policy is the most effective method of reducing the level of unemployment in an economy.How can a reduction in Corporation Tax lead to supply side improvements in an economy?
- A change in which of the following variables will have NO direct effect on domestic demand?domestic incomegovernment spendingtaxesthe interest rate (r)none of the aboveThe supply-side effects show that a tax cut on labor income ________ the supply of labor and ________ employment. decreases; increases increases; increases increases; does not change increases; decreases decreases; decreases The supply-side effects of an income tax cut ________ potential GDP and ________ aggregate supply. increase; decrease decrease; decrease decrease; increase increases; do not change increase; increase Which of the following is a monetary policy goal? i. keeping the inflation rate low ii. attaining maximum employment iii. keeping the long-term interest rate at a moderate level ii only i, ii, and iii i only iii only i and iii When real GDP is greater than potential GDP, there is ________ which leads the inflation rate to ________. Group of answer choices an inflationary gap; fall a recessionary gap; rise a recessionary gap; fall a recessionary gap; remain stable an inflationary gap; rise Which…supply equation is Y - Ypot + 80 (P-Pe), where Ypot is the potential level of output. In 2016, the population was 400 million, and the structure of the economy was described by the following equations for household consumption behavior and taxes received: C = 100+ 0.8DI, and T = 0. where all monetary values are in billions of dollars. Government spending was fixed at $1700 billion, and firm's investment behavior was fixed at $800 billion. Trading is allowed in this economy and in 2016, trading occurred such that the trade account was balanced. That is, net exports (X-IM) was equal to zero. (Question 15 of 20) Now consider that in in the following year (2017), the government decided to implement a policy aimed at moving the economy to full employment. In its decision to move the economy to full employment, they used government spending as the policy tool. The structure and fixed spending behaviors remain the same as they were in 2016, except for government spending. In addition, changes…
- When the Federal government takes action to change taxes and spending to stimulate the economy such policy is: A) Discretionary B) Passive C) Automatic D) NondiscretionaryWhich of the following is NOT counted in the "G" component of spending Group of answer choices the federal government purchases three new military fighter planes the state government spends $100 million building a new section of highway the city government pays the salaries of teachers social security payments to retireesDurable goods and non-durable goods comprise approximately ________ of the supply side of the GDP. 1% 20% 30% 55%