Discretionary Policy Deficits Are Associated With

question 56

Multiple Choice

Discretionary policy deficits are associated with:

• A)increases in national saving.
• B)higher prices.
• C)lower outputs.
• D)lower interest rates.
• E)raising taxes.

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Definitions:

Supply-Siders

Advocates of the economic theory that reducing tax rates and regulatory barriers to production lead to an increase in supply of goods and services, driving economic growth.

Tax Rates

The percentages at which income, purchases, or other financial transactions are taxed by governments.

Saving

Disposable income not spent for consumer goods; equal to disposable income minus personal consumption expenditures.

Deregulation

The process of reducing or eliminating government power in a particular industry, usually to create more competition within the industry.