Supply-side tax cuts designed to increase investment spending are attractive in theory, but in practice
a. the effect is the opposite of what theory suggests.
b. are less useful, because they take a long time to increase the capital stock.
c. they have no effect on the capital stock in the short or long run.
d. are powerful in the short run as capital stock rapidly increases, but the effect tapers off in the long run.
b
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As real disposable income increases, consumption expenditures
A) increase by the same amount. B) increase by a smaller amount. C) increase by a larger amount. D) remain constant.
Welfare data show that in the United States
a. most welfare recipients receive benefits only for a short time. b. welfare encourages young women to have children. c. children brought up on welfare tend to remain on welfare as adults. d. having poor parents does not increase the chances of a child's being on welfare as an adult. e. children of poor parents have a 50 percent chance of being middle-income adults.