In the Medium Run,a Tax Cut That Causes an Increase

question 72

Multiple Choice

In the medium run,a tax cut that causes an increase in the budget deficit will affect which of the following?

• A)the level of output but not its composition
• B)both the level and composition of output
• C)only the composition of output
• D)only the price level
• E) none of the above

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Definitions:

Financial Information

Data relating to the financial performance, position, and cash flows of a business, which is used by stakeholders to make economic decisions.

Return on Total Assets

A profitability ratio that measures net income produced by total assets within a period.

Financial Information

Data that pertains to the financial status, performance, and changes in financial condition of an entity.

Days' Sales Uncollected

A measure of how quickly a company converts its accounts receivable into cash, indicating the average number of days sales remain uncollected.