The monetarists would expect a tax cut to have a strong effect on output only if the spending increase was
a. financed by a sale of bonds.
b. financed by a cut in government spending.
c. financed by an increase in the money stock.
d. accompanied by a reduction in the deficit.
C
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Unemployment normally arises when:
A) labor markets are frictionless. B) wages are above the market clearing wage level. C) wages are below the market clearing wage level. D) wages are equal to market clearing wage level.
In a given market, a large number of firms sell a similar product. Consumers think that each firm's product is somewhat different from that of its competitors. This market is
A) perfectly competitive. B) monopolistically competitive. C) equivalent to a monopoly because consumers think the products are different. D) equivalent to an oligopoly because consumers think the products are different.