congress proposses to stimulate the economy by cutting taxes for middle income families, but raising taxes for wealthier tax payers. the effect will be the same net taxes collected. but the number of taxpayers paying less will be higher. according to which of the following theories would this stimulate the economy? 1. fiscal policy 2. supply side 3. monetary policy a. 1 and 3 b. 3 only c.1,2,and 3 d. 1 only e. none of these are correct
I’m going with E.
Fiscal policy should be correct. This has nothing to do with supply side, and it is definitely not monetary policy… unless I am going crazy a day before results are out.
Ill go with D
Tax policy falls under Fiscal policy. D should be correct.
Ill go with E
D for me as well.
here is the answer it was kinda tricky. all of you who answered e are correct. since there was no NET reduction in taxes, the tax plan would not create a fiscal stimulus. therefore fiscal policy is not relevent. the other two obviously are not either. thanx for responding
Bad question! It asked which would stimulate the economy. It didn’t ask which is a fiscal stimulus!
i’ll go with “bad question”. if it asks what i presume we are to imply it is asking (ie “this proposal is an example of which of the following types of policy?”): then it’s D - fiscal. (not monetary, and it’s the reverse of supply side) BTY - CFA no longer has this type of question format - ie with possible answers like: a. 1 and 3 b. 3 only c.1,2,and 3 d. 1 only e. none of these are correct Now they just have: A) xxx B) yyy C) zzz D) none of these (or whatever) this is good news!! cheers
No it didnt. Read the ENTIRE question again. Dreary Wrote: ------------------------------------------------------- > Bad question! > It asked which would stimulate the economy. It > didn’t ask which is a fiscal stimulus!