Which of the Following Statements Is True

question 68

Multiple Choice

Which of the following statements is true?

• A)A reduction in tax rates along the downward-sloping portion of the Laffer curve would increase tax revenues.
• B)According to supply-side fiscal policy, lower tax rates would shift the aggregate demand curve to the right, expanding the economy and creating some inflation.
• C)The presence of the automatic stabilisers tends to destabilise the economy.
• D)To combat inflation, Keynesians recommend lower taxes and greater government spending.

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Definitions:

Operation Costing System

An Operation Costing System is a hybrid costing method used to calculate the cost of products that have both characteristics of batch-produced and continuously produced items.

Direct Materials

Raw materials that can be directly traced to the production of specific goods or services, such as wood for furniture or fabric for clothing.

Tea Leaves

Used metaphorically to refer to signs or indicators that predict future trends or outcomes, traditionally derived from reading patterns in tea leaves.

FIFO Method

"First In, First Out," an inventory valuation method where the oldest inventory items are recorded as sold first.