Both Keynesians and Real Business Cycle Proponents Believe That Tax

question 42

Multiple Choice

Both Keynesians and real business cycle proponents believe that tax cuts increase output

• A)and both agree it does this through increasing aggregate demand.
• B)but Keynesians believe it does this through increasing aggregate demand and not aggregate supply.
• C)but Keynesians believe it does this through increasing aggregate supply and not aggregate demand.
• D)and both agree it does this through increasing aggregate supply.

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Definitions:

Actively Traded

Describes securities or assets that are frequently bought and sold, often indicating high liquidity and market interest.

Reversing Trade

The process of undoing or closing out a trading position, often used to correct an incorrect trade or take profits.

Long

A term used in investing to denote the purchase of a security with the expectation that the asset will rise in value.

Futures Contract

A legally binding agreement standardized across the industry to purchase or sell a particular item at a set price at a future date, typically utilized for trading commodities or financial assets.