A senator states, "We need to cut taxes in order to increase incentives to work and produce, so that we can pull the nation out of this economic slump." A mainstream economist who is a critic of this
Policy would likely reply that
A) rather than cutting taxes, there should be a decrease in government spending to address the problem.
B) rather than cutting taxes, monetary policy should become tighter to control the inflation rate.
C) increasing government spending is a surer way to increase production and pull the nation out of this economic slump.
D) cutting taxes will only reduce output further and aggravate the situation.
Correct Answer:
Verified
Q198: The long-run Phillips Curve is vertical at
A)
Q199: Supply-side policies can be described in terms
Q200: When the rate of inflation is decreasing,
Q201: The short run in macroeconomics is a