Ask Question
21 October, 17:37

The Romer and Romer 2010 paper in the American Economic Review found that tax changes that are made to promote long-run growth or to reduce an inherited budget deficit tend to result in ___.

+1
Answers (1)
  1. 21 October, 17:47
    0
    Group of answer choices:

    A) An uncertain correlation between taxes and output GDP.

    B) A strong negative relationship between taxes and output GDP.

    C) A strong positive relationship between taxes and output GDP.

    D) A weak positive relationship between taxes and output GDP.

    Answer:

    The correct answer is letter "C": A strong positive relationship between taxes and output GDP.

    Explanation:

    According to "The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks" published by Christina and David Romer in 2010 tax increases are highly contractionary causing relevant-robust effects in the overall economy, positively affecting the Gross Domestic Product (GDP) output level.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The Romer and Romer 2010 paper in the American Economic Review found that tax changes that are made to promote long-run growth or to reduce ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers