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:

Long-Term Change

A significant modification or transformation that occurs over an extended period, impacting environments, societies, or biological evolution.

Learning

The process by which knowledge or skills are acquired as a result of experience; a change in the behavior of an animal that results from experience.

Experience

The knowledge or skill acquired through involvement in or exposure to events.

Compass Sense

The sense of direction an animal requires to travel in a straight line toward a destination.