In the Basic Keynesian Model, a Tax Cut

question 126

Multiple Choice

In the basic Keynesian model, a tax cut:

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

---

Definitions:

Exponential

Pertaining to a mathematical function or increase that grows more significant or at an increasingly rapid rate relative to its current value.

Standard Deviations

A way of evaluating the extent of dispersion or deviation in a group of values.

Normal Distribution

A probability distribution that is symmetric around its mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Statistical Inference

The process of drawing conclusions about population parameters based on a sample taken from the population.