Both Keynesians and real business cycle proponents believe that tax cuts increase output
a. and both agree it does this through increasing aggregate demand.
b. but Keynesians believe it does this through increasing aggregate demand and not aggregate supply.
c. but Keynesians believe it does this through increasing aggregate supply and not aggregate demand.
d. and both agree it does this through increasing aggregate supply.
B
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What effect would economic weakness in Europe due to a sovereign debt crisis have on the U.S. economy?
A) IS shifts to the right B) IS shifts to the left C) potential GDP increases D) potential GDP decreases
The frequency of banking panics was greatly reduced when
a. the Federal Reserve was created b. the federal government started insuring banking deposits c. the Federal Reserve increased the required reserve ratio d. the Federal Reserve started using open market operations e. the Federal Reserve decided to take a less active role in controlling the money supply