test 2 further study Flashcards
1
Q
Laffer Curve suggest?
A
Tax rate rises = tax revenue rises, reach maximum point
THEN fall with further increase in tax rates
2
Q
why is money valuable
A
Acceptability
Legal tender
Relative scarcity
3
Q
How is the purchasing power of money related to the price level?
A
Prices increase = lose purchasing power
Prices decrease = increase in purshcaing power
4
Q
The decrease in private expenditures that occurs as a consequence of increased government spending or the need to finance a budget deficit.
What are the basic functions of money?
A
crowding out
5
Q
A
