Fiscal policy under the Reagan administration was intended to:
a. stimulate the economy by decreasing taxes in order to increase consumption.
b. increase tax revenues by increasing the tax rate.
c. balance the budget by increasing defense spending and increasing taxes.
d. stimulate the economy by decreasing taxes in order to increase aggregate supply.
e. stimulate the economy by increasing government spending in order to increase aggregate supply.
Question 2
If the consumer price index (CPI) is 200 one year and 206 the next year, the annual rate of inflation as measured by the CPI is approximately _____.
a. 103 percent
b. 1 percent
c. 6 percent
d. 3 percent
e. 206 percent
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