Refer to the Laffer Curve above. An increase in the tax rate from T3 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
A. Decrease tax revenues and support the views of supply-side economists
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If net taxes were lowered from $5,000 to $1,000 . the marginal propensity to consume is 0.75, and autonomous consumption spending is $10,000 . by how much would consumption increase?
a. $3,000 b. $1,250 c. $7,500 d. $3,750 e. $750
Because increases in input prices eventually make it to consumers when they buy the final product, the PPI:
A. is considered a good predictor of future consumer prices. B. is a lag variable for inflation. C. accounts for inflation before it reaches consumers, adjusting the CPI downward. D. accounts for inflation before it reaches consumers, adjusting the CPI upward.