The Classical Model Predicts That,in the Short-Run,a Tax Cut Financed

question 19

Multiple Choice

The classical model predicts that,in the short-run,a tax cut financed by an increase in the money supply would

• A)leave output and the price level unchanged.
• B)increase the price level but leave output unchanged.
• C)increase output but and reduce the price level.
• D)increase output and the price level by increasing aggregate demand.
• E)None of the above.

---

Definitions:

Conditional Gifts

Gifts given with specific conditions that must be met for the transfer of ownership to be complete.

Completed Gifts

Gifts that have fully satisfied legal requirements to be considered given, typically including the donor's intent to give, delivery of the gift to the donee, and acceptance of the gift.

Revoked

Withdrawn, cancelled, or annulled, often referring to the withdrawal of an offer, license, or privilege.

Personal Property

All movable property that is not classified as real estate, including vehicles, furniture, and intellectual property.