Supply-side theory suggests that
A) aggregate supply does not depend on labor productivity.
B) increased government spending does not increase aggregate demand.
C) lower tax rates may not reduce overall tax revenues.
D) increased labor productivity may not increase real output.
C
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A major problem with household data is that:
a. the income of the households vary greatly. b. the households usually vary in their consumption patterns. c. the households usually comprise of only one individual. d. collecting data from the households is highly inconvenient. e. the number of persons per household varies greatly.
Assume the required reserve ratio (RRR) is 10 percent. If the Fed purchases a $5,000 bond from a bond dealer who then deposits the $5,000 in a HSBC Bank account, what has happened to the money supply?
a. It has decreased by $5,000. b. It has increased by $5,000. c. It has decreased by $4,500. d. It has increased by $4,500. e. There has been no change in the money supply.