If income falls below its potential and the income tax rate is reduced, this will:
A) raise both the cyclical and structural deficits.
B) raise the cyclical deficit but reduce the structural deficit.
C) reduce the cyclical deficit but raise the structural deficit.
D) reduce both the cyclical and structural deficits.
Correct Answer:
Verified
Q34: A policy of fiscal austerity could have
Q35: The structural deficit:
A)rises as the economy expands
Q36: The cyclical deficit:
A)is not affected by changes
Q37: Economists who focus on the need for
Q38: Compared to the predictions of the standard
Q40: Deficits and surpluses are best viewed as:
A)comprehensive
Q41: Policymakers generally are:
A)more concerned about structural deficits
Q42: In the formula to calculate the real
Q43: Suppose that the economy has a structural
Q44: If an economy is operating at potential
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