1. In the 1980s President Ronald Reagan implemented supply side policies in the economy. What do supply side economists believe?When tax rates are reduced, aggregate demand rises. When tax rates are reduced, aggregate demand rises.

When tax rates are reduced, aggregate supply falls.

When tax rates are increased, aggregate demand falls.

When tax rates are reduced, aggregate supply rises.

2. In 2016, the government of Ostentia experienced a budget deficit of $40 billion and as a result

the government of Ostentia's debt would be $40 billion.

the government of Ostentia's debt would decrease by $40 billion.

the government of Ostentia's debt would increase by $40 billion.

7. When a country's economy is producing at a level that is less than its potential GDP, the standardized (or full) employment deficit will show a ________ than the actual deficit.

larger deficit

smaller surplus

smaller deficit

8. A contractionary fiscal policy by a government may result in which of the following?

crowding out of private investment a reduction in government borrowing

lower interest rates

An increased trade deficit

9. An example of a regressive tax is a/an

Medicare payroll tax of 2.9% of income for everyone, regardless of how much they earn. Income tax with a 10% tax rate on low income households and 20-30% tax rates on higher income households.

Social Security tax rate of 6.2% on earned income below $117,000 and 0% on income earned above $117,000.

15. If corporate income taxes increased from 23% to 28%, which of the following would be most impacted?

the Federal government budget state governments' budgets

cities and counties' budgets