When Susan Makes the Statement, "The Government Should Spend Less

question 552

Multiple Choice

When Susan makes the statement, "The government should spend less money to take care of national parks," she is

• A) making a positive statement.
• B) facing the standard of living tradeoff.
• C) making a normative statement.
• D) testing an economic model.

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Definitions:

Supply-Siders

Economic theorists who believe that lower taxes, decreased regulation, and a reduced role of government in the economy will lead to increased production and supply, driving economic growth.

Tax Rates

The percentage of income or value of goods taxed by the government, varying across different income brackets and types of goods.

Inflation

A sustained increase in the general price level of goods and services in an economy over a period of time, usually measured by the consumer price index (CPI).

Countercyclical Intervention

Economic policies or actions taken to counteract the negative effects of economic downturns.