A Temporary Tax Cut Would Not Be Effective in Stimulating

question 135

Multiple Choice

A temporary tax cut would not be effective in stimulating aggregate demand if

• A)the tax cut were large
• B)the MPC were relatively high
• C)the economy were in a contractionary gap
• D)the short-run aggregate supply curve were relatively flat
• E)people based consumption decisions on their level of permanent income

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Definitions:

Achievement Motivation

The drive or urge to attain a goal or a standard of excellence, often related to the persistence and effort people put into tasks to meet personal and societal criteria of success.

David McClelland

is known for his work on achievement motivation, including the theory that people are motivated by the need for achievement, power, and affiliation.

Need Achievement Theory

A psychological theory that explores motivation and focuses on how an individual's need for achievement influences their behavior and performance.

TAT

Thematic Apperception Test, a projective psychological test that involves creating stories about ambiguous scenes and images, used to uncover a person's underlying thoughts, motives, and feelings.