The Laffer curve reflects the view that when
A. tax rates are too low, raising them creates a greater incentive for suppliers to increase production.
B. tax rates are too high, lowering them not only creates greater incentive for suppliers to increase production, but also ends up generating higher tax revenues.
C. tax revenue is too low, the only way to increase it is through higher tax rates.
D. tax rates are too high, lowering them also reduces tax revenue.
Answer: B
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Refer to Figure 27-5. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, and no fiscal or monetary policy is pursued, then at point B
A) the economy is above full employment. B) firms are operating below capacity. C) there is pressure on wages and prices to rise. D) income and profits are rising. E) the unemployment rate is very low.
Suppose Always There Wireless serves 100 high-demand wireless consumers, who each have a monthly demand curve for wireless minutes of QdH = 200 - 100P, and 300 low-demand consumers, who each have a monthly demand curve for wireless minutes of QdL = 100 - 100P, where P is the per-minute price in dollars. The marginal cost is $0.25 per minute. Suppose Always There Wireless charges $0.25 per minute. How many minutes will high-demand consumers purchase?
A. 75 B. 175 C. 200 D. 100
The welfare reforms of 1996 were entirely driven by flawed character biases
Indicate whether the statement is true or false
Samantha recently quit her job at the university because she is looking for another job for which she is qualified in a small town. Samantha is
A. Frictionally unemployed. B. Not part of the labor force and does not contribute to the unemployment rate. C. Structurally unemployed. D. A discouraged worker and is part of the unemployment statistic.