Economists Agree on All of the Following Statements EXCEPT Which

question 49

Multiple Choice

Economists agree on all of the following statements EXCEPT which one?

• A)Increases in the money supply shift aggregate demand to the right.
• B)In the long run, increases in the money supply increase prices, but not output.
• C)Recessions are associated with decreases in consumption, investment, and employment.
• D)Government should use fiscal policy to try and stabilize the economy.

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Definitions:

Progressive Taxation

Progressive taxation is a tax system where the tax rate increases as the taxable amount or income of the taxpayer increases, making it proportionally more significant for higher-income earners.

Proportional Taxation

A tax system where the tax rate is fixed and does not change with the income level of the taxpayer, implying everyone pays the same percentage of their income in taxes.

Regressive Taxation

A tax system where the tax rate decreases as the taxable amount increases, meaning lower-income individuals pay a higher percentage of their income compared to higher-income earners.

Tax Incidence

The distribution of tax burden among taxpayers; who ultimately pays the tax.