According to the supply-side view of fiscal policy, if the impact ...

[bobbysung]

According to the supply-side view of fiscal policy, if the impact on tax revenues is the same, does it make any difference whether the government cuts taxes in a way that reduces marginal tax rates or in a way that does not reduce marginal tax rates?
 a. No; both actions will exert the same impact on aggregate supply and demand.
 b. Yes; only lower marginal tax rates will increase the incentive to earn income and thereby stimulate aggregate supply.
  c. No; in both cases people will increase their saving in the expectation of higher future taxes and thereby offset the stimulus effect of lower taxes.
  d. Yes; interest rates will increase if marginal tax rates are lowered, whereas they will tend to decrease if marginal tax rates are left unchanged.

Question 2

The Federal Reserve System was created in 1913, through the Federal Reserve Act, by the:
 a. U.S. President.
  b. Judiciary.
  c. Congress.
  d. International Monetary Fund.
  e. State governments.

[snackralk]

Answer to Question 1

b

Answer to Question 2

c

[bobbysung]

Excellent

[kthug]

Gracias!