The Taxpayer Relief Act of 1997 created the Hope Higher Education Scholarship program which provides a maximum of $1,500 in tax credits for the first two years of college for families with adjusted-gross incomes of less than $100,000 . What effect do you think this act might have on the aggregate supply curve?
This act lowers the cost of a college education, encouraging people to invest in education. In the short run, it reduces the number of young people in the labor force (because they're in college) which shifts the AS curve to the left but in the long run these people enter the labor force with greater skills so that they're more productive, shifting the AS curve out to the right.
You might also like to view...
In 2012, net worth was about what percentage of total funds raised by banks?
A) 2% B) 7% C) 13% D) 35%
Which of the following is a difference between taxing buyers and taxing sellers?
a. Taxing buyers results in a decrease in equilibrium quantity, whereas taxing sellers results in an increase in equilibrium quantity. b. Taxing buyers results in an increase in equilibrium quantity, whereas taxing sellers results in a decrease in equilibrium quantity. c. Taxing buyers results in a decrease in equilibrium price, whereas taxing sellers results in an increase in equilibrium price. d. Taxing buyers results in an increase in equilibrium price, whereas taxing sellers results in a decrease in equilibrium price.
The real exchange rate is the:
A. price of the average domestic good or service relative to the price of the average foreign good or service, when prices are expressed in terms of a common currency. B. quantity of foreign currency assets held by a government for the purpose of purchasing the domestic currency in the foreign exchange market. C. nominal exchange rate adjusted for domestic inflation. D. rate at which two currencies can be traded for each other.
Refer to the information provided in Figure 13.8 below to answer the question that follows. 
Figure 13.8 Refer to Figure 13.8. The only firm producing electricity has the long-run average total cost curve shown. The total amount of demand for kilowatts is 100,000 per hour. It makes economic sense for this firm to be the only producer of electricity because this firm
A. must have control over a scarce factor of production. B. must be realizing economies of scale in producing electricity. C. must have a government franchise to produce electricity. D. must have a patent on the production process necessary to produce electricity.