Assume individuals consider only the medium run effects of changes in future macro variables when forming expectations of future output and future interest rates. Suppose current taxes are cut AND that individuals expect future taxes to decrease. Given this information, we know with certainty that
A) current output and the current interest rate will both increase.
B) current output will increase.
C) the current interest rate will increase.
D) the expected future interest rate will increase.
D
Economics
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A decrease in the supply of a good will result in a rightward shift in the demand curve for the good
a. True b. False Indicate whether the statement is true or false
Economics
If Asian economies suffer a serious economic slump, U.S. net exports will
a. increase and AD will shift rightward. b. increase and AD will shift leftward. c. decrease and AD will shift leftward. d. decrease and AD will shift rightward.
Economics