In the Short Run, Tax Cuts That Are Intended to Increase

question 124

Multiple Choice

In the short run, tax cuts that are intended to increase aggregate supply have

• A)almost no effect on aggregate demand, and a small effect on aggregate supply.
• B)about an equal effect on both aggregate demand and aggregate supply.
• C)a much greater effect on aggregate demand than on aggregate supply.
• D)almost no effect on aggregate supply, and a negative effect on aggregate demand.

---

Definitions:

Federal Budget Deficits

The difference between what a government spends and what it collects in taxes over a fiscal year, with deficits indicating more spending than revenue.

Money Supply

The full measure of monetary assets within an economy, involving cash, coins, and balances in checking and savings accounts, at a specified moment.

Expansion

The process of a business or economy growing and increasing its production and activities.

Records

Documents, files, or electronic data that provide evidence of activities, transactions, or decisions, or can refer to vinyl discs used for playing music.