Suppose that in a certain nation the flat income tax rate of 40 percent is reduced to 35 percent and as a result the tax base falls from $400 billion to $375 billion. As a result, tax revenues __________, indicating the nation is on the __________ portion of its Laffer curve

A) rise; upward-sloping
B) rise; downward-sloping
C) fall; upward-sloping
D) fall; downward-sloping

C

Economics

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If the banking system has a large amount of reserves, many banks will have excess reserves to lend and the federal funds rate will probably ________; if the level of reserves is low, few banks will have excess reserves to lend and the federal funds

rate will probably ________. A) fall; fall B) fall; rise C) rise; fall D) rise; rise

Economics

Classical economists believed that the economy automatically moves toward equilibrium at full employment

a. True b. False Indicate whether the statement is true or false

Economics