A reduction in the marginal tax-rate includes an income effect that tends to increase savings
a. True
b. False
Indicate whether the statement is true or false
False
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Which of the following decreases the demand for money?
A) an increase in income B) an increase in real GDP C) a decrease in the price level D) expectations of higher bond prices
In a decreasing-cost industry, an increase in output will lead to
A) an upward shift in the ATC curve. B) an upward shift in the MC curve. C) a reduction in long-run per-unit costs. D) an increase in long-run per-unit costs.
If the short-run aggregate supply increases by less than the long-run aggregate supply, then, at the short-run equilibrium
A) GDP will be below potential GDP. B) aggregate demand will increase. C) GDP will be above potential GDP. D) GDP will be equal to potential GDP.
When the price of a good increases, what would we expect to see in the markets for its substitutes?
A. Higher prices and increased sales B. Lower prices and increased sales C. Higher prices and decreased sales D. Lower prices and decreased sales