The Romer and Romer 2010 Paper in the American Economic

question 130

Multiple Choice

The Romer and Romer 2010 paper in the American Economic Review identified the major motivations for most significant legislated tax changes to be the following, except:

• A) Adjustments made to match changes in government spending
• B) Offsetting the monetary policy pursued by the Federal Reserve
• C) Addressing an inherited budget deficit
• D) Promoting long-run economic growth

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Definitions:

Arithmetic Growth

A form of growth characterized by a constant increase by a fixed amount in a series over equal time periods.

Logistic Equation

A mathematical model used to describe the growth of populations under limiting factors, showing how a population can reach a carrying capacity.

Exponential Growth

A pattern of data that increases more rapidly in proportion to the growing total number, commonly seen in populations or investments.

Carrying Capacity

The maximum population size of a species that an environment can sustain indefinitely, given the food, habitat, water, and other necessities available in the environment.