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When Taxes Are Included in the Stylized DSGE Model, with Cobb-Douglas

Question 109

Multiple Choice

When taxes are included in the stylized DSGE model, with Cobb-Douglas production, labor demand is given by:


A) w=(1τ) 2/3AˉK1/3L1/3w = ( 1 - \tau ) \cdot 2 / 3 \cdot \frac { \bar { A } K ^ { 1 / 3 } } { L ^ { 1 / 3 } }
B) w=ˉ(1τ) wcw = \bar { \ell } \cdot \frac { ( 1 - \tau ) w } { c }
C) w=(1τ) 2/3w = ( 1 - \tau ) \cdot 2 / 3
D) w=(1τ) 2/3L1/3w = ( 1 - \tau ) \cdot 2 / 3 \cdot L ^ { 1 / 3 }
E) w=(1τ) 1/3AˉL2/3K2/3w = ( 1 - \tau ) \cdot 1 / 3 \cdot \frac { \bar { A } L ^ { 2 / 3 } } { K ^ { 2 / 3 } }

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