Refer to the Laffer Curve above. A cut in the tax rate from T5 to T4 would:
A. Decrease tax revenues and support the views of supply-side economists
B. Increase tax revenues and support the views of supply-side economists
C. Increase tax revenues and support the views of mainstream economists
D. Decrease tax revenues and support the views of mainstream economists
B. Increase tax revenues and support the views of supply-side economists
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In the Keynesian aggregate expenditure model, the equilibrium level of income is achieved when
a. actual saving equals actual investment. b. planned aggregate expenditures equal total output. c. consumption equals income times the marginal propensity to consume. d. the marginal propensity to consume equals planned output.
Suppose that McDonald's successfully implements self-serve kiosks in their restaurants, and this investment in technology allows the company to reduce the number of employees at each location. All else equal, this technological improvement would ________
the equilibrium price for its products and ________ the equilibrium quantity consumed. A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease