If a generous investment tax credit were enacted, we could expect both aggregate demand and LRAS...
If a generous investment tax credit were enacted, we could expect
|
both aggregate demand and LRAS to decrease in the same period |
||
|
both aggregate demand and LRAS to increase in the same period |
||
|
aggregate demand to increase first and LRAS to increase later |
||
|
LRAS to increase first and aggregate demand to increase later |
Homework Answers
Option 3
With the generous investment credit, the disposable income increases which increases aggregate demand, for the increased demand the supply increases later
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If a generous investment tax credit were enacted, we could
expect
both aggregate demand and LRAS...
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a. Which of the following events would likely cause the decrease
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Personal consumption falls as workers become concerned about
future employment prospects.
Imports decrease due to increased foreign prices.
Gross investment increases as capital units become fully
utilized.
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Personal consumption falls as workers become concerned about
future employment prospects.
Imports decrease due to increased foreign prices.
Gross investment increases as capital units become fully
utilized.
b. A decrease in aggregate demand is of policy concern due to
the increase in the:
unemployment rate.
productivity of workers.
price level.
c. Which policy action should the federal government enact?
Increase personal income tax rates
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