Suppose the economy experiences an inflationary gap. Policymakers who believe that government is too big would favor which of the following policies to close the gap?
A) reduction in government spending
B) increases in income tax rates
C) increases in corporate tax rates
D) increases in interest rates
Ans: A) reduction in government spending
Economics
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If a firm can create important complements to its original product, it has
a. Created an uncontrollable factor that can change the demand for its product b. Created an uncontrollable factor that cannot change the demand for its product c. Created a controllable factor that can change the demand for its product d. Created a controllable factor that cannot change the demand for its product
Economics
In the short-run macro model, if the economy is in equilibrium, it must also be operating at full employment
a. True b. False
Economics