If people expected that a fiscal policy in the form of a tax cut wastemporary, then this policy's effect on the economy will tend to be:Select one:O a. StrongerO b. WeakerO c. The exact opposite of what was intendedO d. As the multiplier effect would predictO e. None of the choices

This policy would be weaker because it would be temporary.

If people expected that a fiscal policy in the form of a tax cut was temporary, then this policy's effect on the economy will tend to be: Select one: a. Stronger O b. Weaker O c. The exact opposite of what was intended O d. As the multiplier effect would predict O e. None of the choices

If people expected that a fiscal policy in the form of a tax cut was temporary, then this policy's effect on the economy will tend to be: Select one: a. Stronger O b. Weaker O c. The exact opposite of what was intended O d. As the multiplier effect would predict O e. None of the choices

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter30: Government Budgets And Fiscal Policy

Section: Chapter Questions

Problem 30RQ: Under what general macroeconomic circumstances might a government use expansionary fiscal policy?...

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Concept explainers

Fiscal Policy and Money Market

Fiscal policy is one of the important tools that is used by the government to control inflation or aggregate demand in the economy. Under this policy, there are two rules which are used by the government, one is the expenditure of the government and the other is the taxation or income of the government which it collects from the public.

Question

If people expected that a fiscal policy in the form of a tax cut was
temporary, then this policy's effect on the economy will tend to be:
Select one:
O a. Stronger
O b. Weaker
O c. The exact opposite of what was intended
O d. As the multiplier effect would predict
O e. None of the choices

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