If the federal government announces a tax cut, which of the following is most likely in the short run?
a. A decrease in output, an increase in money demand, and an increase in the interest rate
b. An increase in output, a decrease in money demand, and a decrease in the interest rate
c. A decrease in output, a decrease in money demand, and a decrease in the interest rate
d. An increase in output, an increase in money demand, and a decrease in the interest rate
e. An increase in output, an increase in money demand, and an increase in the interest rate.
E
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Reported GDP increases when, in fact, total production is unchanged when I. there is a shift from household production to market production. II. a previously illegal activity is legalized
A) I only B) II only C) neither I nor II D) both I and II
To raise the most tax revenue, governments should consider taxing goods whose
a. income elasticity of demand is high b. price elasticity of demand is low c. income elasticity of supply is low d. income elasticity of demand is high e. cross elasticity of demand is positive