The labor supply will generally decrease when the income tax rate ________ (if the substitution effect dominates) or transfer payments ________.
A. increases; increase
B. increases; decrease
C. decreases; increase
D. decreases; decrease
Answer: A
You might also like to view...
The real costs of inflation to society include:
A. an increase in the general level of prices. B. higher relative prices. C. lost purchasing power of income. D. interference with long-term planning.
Crowding out is when government borrowing and spending result in __________ interest rates, which reduces business investment and household consumption.
a. flat b. higher c. lower d. reduced
If the economy were producing at point E and moves to point D,
Hypothetical Production Schedule for a Two-Product Economy
A. resources will shift from producing capital goods to producing consumer goods.
B. resources will shift from producing consumer goods to producing capital goods.
C. more capital goods can be produced without any sacrifice in consumer goods production.
D. more consumer goods can be produced without any sacrifice in capital goods production.
During recessions, the change in real GDP is:
A. always negative. B. most often negative, but occasionally positive. C. always positive. D. most often positive, but occasionally negative.