Economics for Today 9th Edition by Irvin Tucker

Exercise 10

Which of the following statements is true ?
A) A reduction in tax rates along the downward-sloping portion of the Laffer curve would increase tax revenues.
B) According to supply-side fiscal policy, lower tax rates would shift the aggregate demand curve to the right, expanding the economy and creating some inflation.
C) The presence of automatic stabilizers tends to destabilize the economy.
D) To combat inflation, Keynesians recommend lower taxes and greater government spending.