Which of the Following Is True

question 78

Multiple Choice

Which of the following is true?

• A) When income tax rates fall,it is possible for tax revenues to rise.
• B) When income tax rates fall,it is possible for tax revenues to fall.
• C) All economists agree that a monetary rule is preferred to discretionary Fed policy.
• D) All economists agree that discretionary Fed policy is preferred to a monetary rule.
• E) a and b

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Definitions:

Inflation Targets

Specific, publicly announced goals for the annual rate of inflation that central banks aim to achieve and maintain to guide monetary policy.

Economic Growth

An increase in the amount of goods and services produced per head of the population over a period of time.

Fed Attention

The focus or monitoring by the Federal Reserve, the U.S. central bank, on various economic indicators and conditions to make monetary policy decisions.

Rational Expectations

A theory in economics that suggests individuals make predictions about the future based on all available information, incorporating their understanding of economic policies and trends.