What are the policies usually advocated by supply-side economists? How do they justify these proposals?
What will be an ideal response?
Following are the usual suggestions:(a) Lower personal income-tax rates(b) Reduce taxes on income from savings(c) Reduce taxes on capital gains(d) Reduce the corporate income taxLowering of taxes would raise the rewards for working, saving, and investing. Then, if people actually respond to these incentives, such tax cuts will increase the total supplies of labor and capital in the economy, thereby increasing aggregate supply.
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You are the mayor of your home town, and one day you arrive at city hall to find angry voters demonstrating against you. They are mad because your office created a garbage-collection monopoly by awarding only one company a permit to collect garbage in
your town. The voters claim that the company is overcharging and providing poor service. They want you to do something that will lower rates and improve service. You call your staff economist, who presents evidence that there are substantial increasing economies of scale to garbage collection. What are your options if you are interested in efficiency?
In the 1990's Ireland made unemployment benefits less generous. This change would likely have reduced
a. both structural unemployment and the natural rate of unemployment. b. structural unemployment but not the natural rate of unemployment. c. both frictional unemployment and the natural rate of unemployment. d. frictional unemployment but not the natural rate of unemployment.
SW's ________________ to fly an average 1,000-mile trip were higher than those of US Airways, Frontier, JetBlue, Alaska, Allegiant and Spirit airlines in 2013
Fill in the blank(s) with the appropriate word(s).
In the long run, the output level is determined by
A. aggregate demand. B. aggregate supply. C. household income. D. the government.