A Tax Cut Combined with Tight Money, as Was the Case

question 55

Multiple Choice

A tax cut combined with tight money, as was the case in the United States in the early 1980s, should lead to a:

• A) rise in the real interest rate and a fall in investment.
• B) fall in the real interest rate and a rise in investment.
• C) rise in both the real interest rate and investment.
• D) fall in both the real interest rate and investment.

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Theory X Manager

A management style characterized by the belief that employees inherently dislike work and must be closely supervised and coerced to achieve productivity.

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