標題: [Econ] Public Finance-tax mc PLZZZZ Helppp [打印本頁] 作者: dumbo101 時間: 2015-6-9 02:09 PM 標題: Public Finance-tax mc PLZZZZ Helppp
Financing government spending by increasing taxation is the preferred method whenA.the interest rate is low
B.corporate profits are low
C.the economy is experiencing inflation
D.the economy is experiencing a recession
Answer should be D
Financing government spending by increasing taxation
-> with limited information - assume to be Balanced Budget
Balanced Budget is one of the expansionary fiscal policies and will shift out AD curve (Increase Price Level and Output)
So, it is preferred method when the economy is experiencing a recession to resolve Low Output (the side effect is little as the current price level is low)