According to the research of Christina Romer and David Romer:
A. a tax reduction of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent.
B. a tax increase of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent.
C. a tax reduction of 2 to 3 percent raises real GDP by roughly 1 percent.
D. a tax increase of 2 to 3 percent lowers real GDP by roughly 1 percent.
B. a tax increase of 1 percent of GDP lowers real GDP by roughly 2 to 3 percent.
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The figure above shows that the deadweight loss from the government's policy is
A) about $350 million. B) about $25 million. C) about $50 million. D) about $100 million. E) zero.
The optimal level of water and air quality
a. is zero, which is a pollution-free environment b. occurs when the marginal private cost of air quality equals its marginal social cost c. is greater if the marginal social cost curve of air quality shifts downward d. occurs when all negative externalities are eliminated e. eliminates the common pool problem