Which of the following is considered contractionary fiscal policy?
A) Congress increases the income tax rate.
B) Congress increases defense spending.
C) Legislation removes a college tuition deduction from federal income taxes.
D) The New Jersey legislature cuts highway spending to balance its budget.
Answer: A
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A) maintain, increasing B) maintain, maintaining C) reduce, increasing D) reduce, maintaining
A successful advertising campaign will
A. Increase the demand for the advertised good. B. Cause the quantity supplied of the advertised good to increase. C. Reduce the perceived utility of the good. D. Increase the absolute value of the price elasticity of demand for the advertised good.