Which statement(s) can make a temporary tax cut to raise output, at least temporarily? Assume that...
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Which statement(s) can make a temporary tax cut to raise output, at least temporarily? Assume that the monetary authority does not change targets. 1) Households and firms use rational expectations. 2) There is a time lag for the policy to be implemented. 3) Households and firms do not solve intertemporal decision problems. 4) The interest rates faced by households, firms, and the government are different. 5) Some households are credit constrained. 6) There is a constant banking markup. O a. 2), 4), and 5) are true. O b. 1) and 2) are true. O c. 5) and 6) are true. d. e. O f. 1), 2) and 6) are true. 3), 4) and 5) are true. 3) and 5) are true. Which statement(s) can make a temporary tax cut to raise output, at least temporarily? Assume that the monetary authority does not change targets. 1) Households and firms use rational expectations. 2) There is a time lag for the policy to be implemented. 3) Households and firms do not solve intertemporal decision problems. 4) The interest rates faced by households, firms, and the government are different. 5) Some households are credit constrained. 6) There is a constant banking markup. O a. 2), 4), and 5) are true. O b. 1) and 2) are true. O c. 5) and 6) are true. d. e. O f. 1), 2) and 6) are true. 3), 4) and 5) are true. 3) and 5) are true.
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The detailed answer for the above question is provided below A 2 4 and 5 are true Tempo rary tax c u t s can rais e output at leas t te mpo rarily if ... View the full answer
Related Book For
Modeling Monetary Economies
ISBN: 978-1107145221
4th Edition
Authors: Bruce Champ, Scott Freeman, Joseph Haslag
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