Which of the Following Policies Would a Supply-Sider Be Most

question 31

Multiple Choice

Which of the following policies would a supply-sider be most likely to support during stagflation?

• A) a countercyclical policy
• B) low marginal tax rates that stimulate incentives for earning income
• C) a fixed or constant rate of growth for the money supply
• D) flexible wages, prices, and interest rates that stabilize economies

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Definitions:

Defined Benefit Plans

A type of pension plan where the employer guarantees a specified pension payment upon retirement, based on factors like salary history and years of service.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

360-Day Year

A simplified approach used in some financial calculations where the year is assumed to have 360 days instead of 365 or 366, to facilitate easier interest calculations.

Note

A financial instrument that represents a promise to pay a specific amount of money at a future date or upon demand.