Using the Keynesian Model,the Effect of a Decrease in the Effective

question 46

Multiple Choice

Using the Keynesian model,the effect of a decrease in the effective tax rate on capital would be to cause ________ in the real interest rate and ________ in output in the long run.

• A)an increase; no change
• B)a decrease; no change
• C)an increase; an increase
• D)no change; a decrease

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Definitions:

Data Trimming

The procedure of removing extreme values from data to mitigate their effect on the analysis.

Weighted Average

An average that takes into account the relative importance or weight of each value in the data set.

Purchase Price

The amount of money paid or agreed to be paid to buy something.

Stock Price

The cost or value of a single share of a company's stock, fluctuating based on supply and demand in the market.