Question Details

Which of the following would not be considered a supply-side tax cut 


1. According to supply siders, the most pronounced effect of a supply-side tax cut is a 
a) leftward shift of the aggregate supply curve 
b) leftward shift of the aggregate demand curve 
c) rightward shift of the aggregate supply curve 
d) rightward shift of the aggregate demand curve 
2. An increase in the overall price level that is accompanied by a short-run increase in unemployment is most likely to be caused by 
a) a decrease in aggregate demand b) a decrease in aggregate supply 
c) an increase in aggregate demand d) an increase in aggregate supply 33 
3. If we are at the natural rate of unemployment, an increase in aggregate demand will lower unemployment in the short run 
a) regardless of workers' price rise estimate 
b) if workers overestimate the consequent price rise 
c) if workers underestimate the consequent price rise 
d) if workers perfectly anticipate the consequent price rise 
4. Which of the following would not be considered a supply-side tax cut ? 
a) a $100 per person tax reduction b) reduced tax rates on interest income 
c) faster capital depreciation allowances d) reduction in the rate of tax on capital gains 
5. The economy's self-correcting mechanisms 
a) are non-existent b) correct inflationary gaps more easily than recessionary gaps 
c) correct recessionary gaps more easily than inflationary gaps 
d) work equally well/poorly for both gaps


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