The Laffer curve suggests that if tax rates are very high tax rates will tax revenues. policies that encourage investment in research and development U Question 13 Supply side fiscal policies include all of the following EXCEPT: Investment in human capital O projects that include the encouragement of new technologies increasing transfer payments. It can be achieved automatically it fiscal policy is held constant It mandates the use of contractionary policies during recessions. At mandates using surpluses from boom times to fund spending during downturns. Question 12 Which statement is NOT true of cyclically balancing the budget? It pushes the government to restrict spending or raise taxes when the economy is booming. An increase in taxes has a smaller impact on output than a reduction in government spending. O An increase in government spending will lead to an equal increase in equilibrium output. An economy will be at equilibrium when I+G+X=S+T+M. Which statement is FALSE? O For an economy at equilibrium, injections will equal withdrawals. The equilibrium output will increase by $400 The equilibrium output will increase by $250 Question 9 2 pts The crowding out effect was cours when getes fiscal policy may malet forever to obtain willed when private contento more than one on when implementation bp met the fact of focal pole Question 10 2 pts which the US.Dresdents plemented wellnown tax cuts destined to com The equilibrium output will reduce by $250. If the marginal propensity to consume in an economy is 0.75, what will be the effect of a reduction in government spending by $100 on the equilibrium output The equilibrium output will reduce by $400. achieve fiscal sustainability in the near future EXCEPT: cuts in Social Security and Medicare o the abolishment of automatic stabilizers O reforms in government accounting procedures massive tax increase to fund future Medicare liabilities Question 7 Which statement is TRUE? Changes in tax rates affect acredite demand but not create supply changes in tax rates affect botherese demand and regate supply An increase in takrat increases individual incentive to An increase in tax rates encourages individuals to work more Question 6 All of these would help the U.S. increased research and development O All of the answers are correct. The swollen ranks of unemployed workers increases outlays for unemployment insurance benefits,welfare, food stamps, and other transfer payments. Question 5 Automatic stabilizers include all of the following EXCEPT: O tax revenues transfer payments.
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