Suppose There Is a Simultaneous Tax Cut and Open Market

question 72

Multiple Choice

Suppose there is a simultaneous tax cut and open market sale of bonds. Which of the following must occur as a result of this?

• A) Output increases.
• B) Output decreases.
• C) The interest rate increases.
• D) The interest rate decreases.
• E) Both output and the interest rate increase.

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Definitions:

Mode of Subsistence

Refers to the means by which a society obtains its basic needs for survival, such as through hunting, gathering, agriculture, or industry.

Age Grades

Social categories based on age, used in various societies to assign roles, responsibilities, and privileges.

Double Unilineal Descent

A system of lineage where individuals belong to both their father's and their mother's descent groups, incorporating elements of both patrilineal and matrilineal descent.

Bilateral Descent

A system of family lineage in which the relatives on both the mother's and the father's sides are considered equally important.