Critical assumptions behind the Laffer curve include
a. labor supply is inelastic.
b. investment is very responsive to higher savings and lower interest rates.
c. the economy is above the marginal tax rate that maximizes tax revenue.
d. both b and c.
e. all of the above.
D
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Employees at the hospital have negotiated a 3 percent increase in wages for the next year, based on their inflation expectations. If inflation is actually 5 percent over the next year, which of the following will occur?
A) Real wages for hospital employees will fall. B) The increase in inflation is expected. C) Inflation will be 3 percent the following year. D) Unemployment of hospital employees will rise.
A decline in autonomous planned investment spending causes the equilibrium level of aggregate output to ________ and shifts the ________ curve to the ________, everything else held constant
A) rise; LM; right B) rise; IS; right C) fall; IS; left D) fall; LM; left
When Andrew earns no income, his base consumption is $500 . When he earns $3,000 per week, he consumes $2,100 per week and saves the rest. If his weekly income increases by $1,000 . then his total consumption is expected to increase to _____
a. $5,800 b. $3,300 c. $6,900 d. $1,500
If the absolute value of the price elasticity of demand for tickets to a football game is 2, then if the price increases by 1 percent, quantity demanded decreases by:
A. 4 percent. B. 0.5 percent. C. 1 percent. D. 2 percent.