Reducing the marginal tax rate on income will
A) reduce the tax wedge faced by workers and increase labor supplied.
B) raise the return to entrepreneurship and encourage the opening of new businesses.
C) increase the after-tax return on saving, and encourage saving.
D) All of the above are correct.
Answer: D
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What will be an ideal response?
With only two goods, if the income effect is in the same direction as the substitution effect then the good is
a. normal b. inferior but not Giffen c. Giffen d. There is not enough information to answer.
If the price level increased from 120 to 130, then what was the inflation rate?
a. 1.1 percent. b. 7.7 percent. c. 10.0 percent. d. 8.3 percent.
In the production function Real GDP = T (L, K), the T represents the tax coefficient
Indicate whether the statement is true or false