Higher rates of inflation
a. reduce real marginal tax rates, increasing savings and investment.
b. increase real marginal tax rates, reducing savings and investment.
c. reduce real marginal tax rates, reducing savings and investment.
d. have no effect on real marginal tax rates, and no effect on savings and investment.
e. none of the above.
B
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Explain how the marginal product and average product of labor change as the labor employed increases (a) initially and (b) eventually
What will be an ideal response?
When compared with China, the growth of clothing exports originating in Bangladesh clearly illustrates the Ricardian model of comparative advantage. Discuss and explain
What will be an ideal response?
Municipal bonds have default risk, yet their interest rates are lower than the rates on default-free Treasury bonds. This suggests that
A) the benefit from the tax-exempt status of municipal bonds is less than their default risk. B) the benefit from the tax-exempt status of municipal bonds equals their default risk. C) the benefit from the tax-exempt status of municipal bonds exceeds their default risk. D) Treasury bonds are not default-free.
Keynesian and classical theories agree that:
a. AS is upward sloping in the short-run. b. AS is vertical in the long-run. c. sustained AD shocks can also shift AS in the long-run. d. all of the above.