Multiple Choice
According to supply-side theories, what happens if the government cuts the tax rate?
A) Workers keep less of each additional dollar they earn, so work effort increases, and aggregate supply shifts right.
B) Workers keep less of each additional dollar they earn, so work effort decreases, and aggregate supply shifts left.
C) Workers keep more of each additional dollar they earn, so work effort increases, and aggregate supply shifts right.
D) Workers keep more of each additional dollar they earn, so work effort decreases, and aggregate supply shifts left.
Correct Answer:
Verified
Correct Answer:
Verified
Q7: Suppose that the MPC is 0.5 and
Q8: If the MPC is 0, what is
Q9: As the MPC gets close to 1,
Q10: If the MPC = 3/4, what is
Q11: Which statement do opponents of active stabilization
Q13: Suppose the closed economy is in long-run
Q14: If the MPC is 0.6 and government
Q15: Which policy would Keynes's followers support when
Q16: Consider the income-expenditure identity in a closed
Q17: If the MPC = 0.8, what is