Compare the effect on the price level and real GDP of a decrease in tax rates assuming a supply-side effect versus no supply - side effect. Compared to no supply - side effect, including a supply - side effect for the decrease in tax rates will cause the price level to increase ____ and real GDP to increase ____. A. more; less B. less; more C. more; more D. less; less
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Suppose a tax cut affected aggregate demand and aggregate supply. The shift in aggregate supply would make the A. price level change by less than otherwise and real GDP change by more than otherwise. B. price level change by more than otherwise and real GDP change by less than otherwise. C. price level and real GDP change by more than otherwise. D. price level and real GDP change by more than otherwise.
Andrew D.
What effects would each of the following have on aggregate demand or aggregate supply, other things equal? In each case, use a diagram to show the expected effects on the equilibrium price level and the level of real output, assuming that the price level is flexible both upward and downward. a. A widespread fear by consumers of an impending economic depression. b. A new national tax on producers based on the value added between the costs of the inputs and the revenue received from their output. c. A reduction in interest rates at each price level. d. A major increase in spending for health care by the federal government. e. The general expectation of coming rapid inflation. f. The complete disintegration of OPEC, causing oil prices to fall by one-half. g. A 10 percent across-the-board reduction in personal income tax rates. h. A sizable increase in labor productivity (with no change in nominal wages). i. A 12 percent increase in nominal wages (with no change in productivity). j. An increase in exports that exceeds an increase in imports (not due to tariffs).
What effects would each of the following have on aggregate demand or aggregate supply, other things equal? In each case, use a diagram to show the expected effects on the equilibrium price level and the level of real output, assuming that the price level is flexible both upward and downward. a. A widespread fear by consumers of an impending economic depression. b. A new national tax on producers based on the value added between the costs of the inputs and the revenue received from their output. c. A reduction in interest rates at each price level. d. A major increase in spending for health care by the federal government. e. The general expectation of coming rapid inflation. f. The complete disintegration of OPEC, causing oil prices to fall by one-half. g. A 10 percent across-the-board reduction in personal income tax rates. h. A sizable increase in labor productivity (with no change in nominal wages). i. $A 12$ percent increase in nominal wages (with no change in productivity). j. An increase in exports that exceeds an increase in imports (not due to tariffs).
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