Category: Fiscal And Monetary Policy

A. The amount of tax paid will increase by Rs4,800
B. The amount of tax paid will increase by Rs4,000
C. The amount of tax paid will increase by Rs 800
D. The total tax paid will be Rs4,800

A. could either increase or decrease
B. decrease
C. increase
D. remain the same, as long as bank hold no excess reserves

A. Tax bands do not increase with inflation
B. Tax rates move inversely with inflation
C. Government spending falls to reduce aggregate demand
D. Tax banks increase with inflation

A. Margaret Thatcher
B. Ronald Reagan
C. Milton Friedman
D. John Maynard Keynes

A. Money multiplier
B. liquidity ratio
C. bank’s line of credit
D. required reserve ratio

A. sells less government bonds than are required to finance the PSBR
B. sells more government bonds than are required to finance the PSBR
C. sells government securities on the open market
D. buys government securities on the open market

A. worsen
B. Improve
C. Stay the same
D. Increase with inflation

A. the time that it takes for policy makers to recognize the existence of boom of bust
B. the time needed for parliament to agree to a tax cut.
C. the time that is necessary to put the desired policy into effect
D. the time that it takes for the economy to adjust to the new conditions after a new policy has been implemented

A. The amount of tax paid increase with income
B. The marginal rate of tax decrease with more income
C. The average rate of tax falls as income increase
D. The average rate of tax is constant as income increases