Chapter 47

Question 1

What is a laaffer curve curve

Answer 1

Shows how when tax rates are high increasing them more can be counterproductive

Question 2

Name three on how Monetary policy is dependent on in achieving macro objectives

Answer 2

Time lag- takes less time to change interest rate
Ability for a central bank to change its exchange rate is dependent on other central banks. If one cuts and one raises then firms may go look abroad for investment