In the traditional Keynesian model, an income tax cut raises real ...

[rlane42]

In the traditional Keynesian model, an income tax cut raises real GDP because
 
  A) consumption spending depends positively on after-tax income.
  B) of the crowding-out effects of taxes.
  C) consumption spending depends negatively on after-tax income.
  D) consumption spending is not related to after-tax income.

Question 2

If the growth rates of nominal GDP and real GDP in an economy are 6 and 2 respectively, the inflation rate in the economy must be:
 
  A) 2. B) 8. C) 4. D) 3.

[ynlevi]

Answer to Question 1

A

Answer to Question 2

C