The wage rate will increase and firms will decrease employment to the point where MRP equals the new wage rate if
A. the supply of labor decreases.
B. the supply of labor increases.
C. the demand for labor decreases.
D. the demand for labor increases.
Answer: A
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If the institutions in an economy change from being extractive to inclusive, then in the economy:
A) geographical conditions will improve. B) returns to education will decrease. C) returns to entrepreneurship will increase. D) geographical conditions will deteriorate.
The Laffer curve illustrates the concept that
a. an increase in marginal tax rates will always cause tax revenues to increase. b. an increase in marginal tax rates will always cause tax revenues to decrease. c. when marginal tax rates are quite high, a decrease in the tax rate may cause tax revenues to increase. d. when marginal taxes are quite low, an increase in the tax rate will probably cause tax revenues to decline.
An increase in government spending will immediately shift
A. aggregate supply to the right. B. aggregate demand to the right. C. aggregate supply to the left. D. aggregate demand to the left.
Taxes, transfer payments, and government purchases are the components of automatic stabilizers.
Answer the following statement true (T) or false (F)