Which of the following would supply-side economists advocate?
I. reducing tax rates in order to encourage people to work more
II. providing investment tax credits to stimulate capital formation spending
III. increasing government spending
IV. increasing transfer payments to those who want to be retrained for employment
A) I, II, III, and IV
B) I, II, and III only
C) I, II, and IV only
D) I and II only
Answer: D) I and II only
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An increase in the supply of money will lead to a(n)
A) increase in equilibrium real GDP and an increase in the equilibrium interest rate. B) increase in equilibrium real GDP and a decrease in the equilibrium interest rate. C) decrease in equilibrium real GDP and an increase in the equilibrium interest rate. D) decrease in equilibrium real GDP and a decrease in the equilibrium interest rate.
"A decrease in the price of tablet computers will decrease the demand for desktop computers." This statement is an example of a normative economic statement
Indicate whether the statement is true or false