A reduction in the money supply is likely to
Reduce the interest rate
Increase the interest rate
Increase inflation
Decrease deflation
In a regressive tax system
The amount of tax paid increases with income
The average rate of tax decreases with more income
The average rate of tax falls as income increases
The average rate of tax is constant as income increases
If there is cyclical unemployment in the economy the government might
Increase interest rates
Encourage savings
cut taxes
Reduce government spending
A government might use tax to
Discourage consumption of goods with positive externalities
Discourage consumption of merit goods
Discourage consumption of public goods
Discourage consumption of goods with negative externalities
The marginal rate of tax paid is
The total tax paid/ total income
Total income/ total tax paid
Change in the tax paid/ change in income
Change in income/ change in tax paid
If the economy grows the governments budget position should automatically
Worsen
Improve
Stay the same
Decrease with inflation
To reduce the supply of money the government could
Reduce interest rates
Buy back government bonds
Sell government bonds
Encourage banks to lend
