Asked by Kericia Halliday on May 27, 2024
Verified
All of the following are likely to be effective at eliminating a recessionary gap except one.Which is the exception?
A) Reducing Social Security payments to beneficiaries
B) Reducing personal income taxes
C) Increasing government expenditures on the interstate highway network
D) Increasing farm subsidies
E) Reducing corporate income taxes
Recessionary Gap
The situation where an economy's real GDP is less than its potential GDP, indicating underutilized resources and economic slack.
Social Security
Social Security is a government program that provides financial assistance to individuals during retirement, disability, or upon the death of a primary wage earner.
Corporate Income Taxes
Taxes levied on the profit of corporations, influencing their investment decisions and bottom line.
- Understand the mechanisms and effects of fiscal policies on aggregate demand and GDP.
Verified Answer
Learning Objectives
- Understand the mechanisms and effects of fiscal policies on aggregate demand and GDP.
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