In the Video,Nariman Behravesh Argued That the Supply-Side Impact of the Reagan

question 46

Multiple Choice

In the video,Nariman Behravesh argued that the supply-side impact of the Reagan tax cuts was

• A) very large, leading to increased government tax revenues.
• B) about equal in magnitude to the demand-side impact of those cuts.
• C) enough to ensure that the size of the federal budget deficit would decrease.
• D) small at first but likely to grow as time went on.
• E) virtually nonexistent, although they did boost investment and lead to higher productivity.

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Definitions:

Disposable Income

The amount of money individuals or households have available to spend or save after taxes have been accounted for.

Saving

The portion of income that is not spent on consumption but instead is set aside for future use or investment.

Disposable Income

Income left for households to direct into savings and spending after deductions of income taxes.

APC

APC, or Average Propensity to Consume, is the ratio of total consumption to total disposable income, indicating how much income is spent.