According to the Application, economist John B. Taylor found that the temporary tax cuts which were a part of the 2009 stimulus package
A) were primarily used to pay off home mortgage balances.
B) were split very evenly between consumption spending and household saving.
C) were very successful in stimulating consumption spending.
D) did very little to stimulate consumption spending.
D
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Assuming that transactions costs are sufficiently low, the Coase theorem results in the economic pie being maximized. What impact do legal constraints have on this prediction of the Coase theorem?
What will be an ideal response?
Incumbents are unaffected by fixed costs of entry while potential entrants are affected by them because
A) for potential entrants the cost is avoidable, while for the incumbent, it is not. B) fixed costs will be greater for the potential entrant than for the incumbent. C) fixed costs are zero for the incumbent. D) incumbents will act to prevent entry at all costs.