The Tax Reform Laws of 1981,1986, and 2001-2003 Were Significant

question 10

Multiple Choice

The tax reform laws of 1981,1986, and 2001-2003 were significant because they

• A)lowered the federal funds rate.
• B)made budget deficits illegal.
• C)significantly reduced the progressiveness of the federal income tax.
• D)significantly increased the progressiveness of the federal income tax.

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Definitions:

Aggregate-supply Curve

A curve showing the total quantity of goods and services that producers in an economy are willing to supply at various price levels.

Phillips Curve

A concept in economics that demonstrates an inverse relationship between the rate of unemployment and the rate of inflation.

Shift

In economics, a change in the position of a demand or supply curve which reflects a change in conditions other than price.

Adverse Supply Shock

A sudden and significant decrease in the supply of a good or service, which typically leads to an increase in prices and can temporarily boost inflation.