State whether the following statements are true or false, justify your response in either case: 1. Government has applied tax cut twice in last year to stimulate the output growth of economy which is still not achieved. The mentioned situation exemplifies the “Inside lag.”
State whether the following statements are true or false, justify your response in either case: 1. Government has applied tax cut twice in last year to stimulate the output growth of economy which is still not achieved. The mentioned situation exemplifies the “Inside lag.”
Chapter15: Fiscal Policy
Section: Chapter Questions
Problem 11SQ
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State whether the following statements are true or false, justify your response in either case:
1. Government has applied tax cut twice in last year to stimulate the output
2. Fiscal policy can affect the rental cost of capital.
3. The concept of sacrifice ratio suggests that reducing inflation is a costless exercise.
4. The short run trade off between inflation and
5. Concept of Hysteresis suggests that the economic shocks affect the economy only for a short time period.
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