In the Basic Keynesian Model, a Decrease in Transfer Payments

question 75

Multiple Choice

In the basic Keynesian model, a decrease in transfer payments:

• A)reduces short-run equilibrium output.
• B)increases short-run equilibrium output.
• C)reduces potential output.
• D)increases potential output.

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Definitions:

Form

A document used to collect or provide information, often used for administrative purposes or in formal transactions, like tax forms.

Income

Payment received, often on a consistent schedule, for employment or from investment profits.

Marginal Ordinary Income Tax Rate

The percentage of tax applied to your income for each tax bracket in which you qualify, increasing progressively as your income surpasses threshold amounts.

Qualified Dividends

Dividend payments received on shares of a corporation, taxed at a lower tax rate than regular income.