Suppose the federal government decidesto cut the corporate profits tax.Everything else held constant, this actioncauses the output gap to becomeand the inflation rate to_- For thereal GDP to return to its potential level,the Fed shouldthe federal fundsrate.Select one:negative; increase; decreasepositive; increase; increasenegative; decrease; decreasepositive; decrease; increase

The fiscal policy affects the aggregate demand curve. Fiscal policy instruments are tax rate and…

Answered: positive: increase; increase increase

Business

Economics

positive: increase; increase increase

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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