(Last Word) According to the Research of Christina Romer and David

question 105

Multiple Choice

(Last Word) According to the research of Christina Romer and David Romer, tax increases implemented to reduce an inherited budget deficit

• A) reduce real output by the same amount as any other tax increase.
• B) reduce real output by more than other tax increases.
• C) reduce real output by less than other tax increases.
• D) increase real output, contrary to what occurs with other tax increases.

---

Definitions:

Demand Function

A mathematical expression that specifies the quantity of a good or service purchased at various prices.

Income

The total money received by an individual or household from various sources like wages, investments, and benefits, over a specified period, often used to fund expenditures.

Price

The price one must pay to obtain a good, service, or asset.

Claret

A term often used in Britain to refer to red Bordeaux wine.