If the Economy Is Below Its Full-Employment Level of Real

question 64

Multiple Choice

If the economy is below its full-employment level of real national income,a supply-side economist would argue the appropriate policy is

• A)expansionary fiscal policy by lowering marginal tax rates.
• B)expansionary fiscal policy of increasing government spending.
• C)lowering marginal tax rates on people and raising them on corporations.
• D)leaving the economy alone and letting the natural forces bring it into a long-run equilibrium.

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Definitions:

Ethanol

A volatile, flammable, colorless liquid alcohol widely used as a solvent and a beverage intoxicating agent.

Mechanism

A process or series of steps that bring about a particular result, often described in the context of chemical reactions.

Organic Product

A compound or substance that has been synthesized from living organisms or contains carbon-based molecules.

Mechanism

Describes the step-by-step sequence of elementary reactions by which overall chemical change occurs.