A temporary tax cut is not likely to be effective in stimulating aggregate demand if:
a. the tax cut is large
b. the MPC is relatively high.
c. the economy experiences a contractionary gap.
d. the short-run aggregate supply curve is relatively flat.
e. people based consumption decisions on their level of permanent income.
e
Economics
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A price above the equilibrium price will:
A) result in quantity supplied being less than quantity demanded. B) result in a shortage. C) create pressure for price to fall. D) tend to rise over time.
Economics
Suppose you withdraw $500 from your checking account deposit and bury it in a jar in your back yard. If the required reserve ratio is 10 percent, checking account deposits in the banking system as a whole could drop up to a maximum of
A) $0. B) $50. C) $500. D) $5,000.
Economics