Multiple Choice
Refer to the following figure when answering the following questions.
Figure 15.1: The Labor Market
-Consider Figure 15.1, which is a representation of the labor market. In 2008, China reduced its corporate tax rate from 33 percent to 25 percent; this would cause a shift from curve ________, because changes in taxes are ________ in the stylized DSGE model.
A) similar to a change in TFP
B) the opposite of a change in income taxes
C) identical to a change in income taxes
D) negatively affected by TFP
E) None of these answers is correct.
Correct Answer:

Verified
Correct Answer:
Verified
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