We would expect, all else equal, that:
A. lower taxes would reduce unemployment.
B. higher taxes would reduce unemployment.
C. taxes would have no effect on unemployment.
D. taxes would be negatively related to unemployment.
A. lower taxes would reduce unemployment.
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In the market for reserves, if the federal funds rate is between the discount rate and the interest rate paid on excess reserves, a decline in the reserve requirement ________ the ________ curve of reserves and causes the federal funds interest rate
to fall, everything else held constant. A) decreases; demand B) increases; demand C) increases; supply D) decreases; supply
In a congressional debate about agricultural price supports, senators, members of congress, and other experts made the following four statements. Which of these is a normative statement?
a. "Price supports are important because America should preserve the small family farm." b. "Without price supports, the price of wheat and corn will fall by over twenty percent." c. "The decline in commodity prices caused by the removal of price supports will result in fewer, larger farms." d. "The decline in commodity prices caused by the removal of price supports will reduce the number of tractors sold in the United States."
The nominal interest rate is 3.5 percent and the inflation rate is 1.5 percent. What is the real interest rate?
a. 5.25 percent b. 5 percent c. 2.3 percent d. 2 percent
Assume the generic production function Q = f (K,L) displays both decreasing returns to capital (K) and decreasing returns to labor (L). Then
A. this production function may display increasing returns to scale. B. this production function will certainly display constant returns to scale. C. this production function will certainly display decreasing returns to scale. D. this production function will certainly display increasing returns to scale.