Multiple Choice
The Keynesian economists do not believe that a cut in the marginal income tax rate will have strong effects on aggregate supply because they
A) do not believe that business investment will respond strongly to changes in the after-tax rate of return to capital.
B) do not believe that labor supply will respond strongly to changes in the after-tax real wage.
C) do not believe that labor demand will respond strongly to a change in the after-tax real wage.
D) believe monetary policy will be too restrictive to allow strong output growth.
Correct Answer:
Verified
Correct Answer:
Verified
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