According to the Keynesian View, If Real GDP Is Slowing

question 58

Multiple Choice

According to the Keynesian view, if real GDP is slowing and the economy appears to be headed for a recession, a reduction in tax rates is

• A) highly appropriate because it will stimulate aggregate demand and, thereby, help to strengthen the economy.
• B) highly inappropriate because it will either reduce the size of the budget surplus or increase the size of the deficit.
• C) not very important because the "demand stimulus effects" of the tax cut will be largely offset by additional borrowing.
• D) not very important because the "demand stimulus effects" of lower current taxes will be largely offset by the expectation of higher taxes in the future.

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Definitions:

Supply Chain Influence

Supply chain influence involves the capacity of a company or entity to affect decisions, activities, and efficiencies within the supply chain, including the practices of suppliers, manufacturers, and distributors.

Demand

The quantity of a good or service that consumers are willing and able to buy at a given price over a certain period of time.

Pricing Promotions

Marketing strategies that temporarily reduce the price of goods or services to stimulate demand or increase market share.

Glomerular Capsule

A sac resembling a cup located at the start of the nephron's tubular part in the kidney, responsible for initiating the blood filtration process to create urine.