What are the policies usually advocated by supply side economists? How do they justify these proposals?
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 tax
Lowering 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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Which of the following statements is TRUE about the role of gifts given to U.S. citizens from foreign residents?
A) Gifts are not included in the balance of payments because of the nature of the gift. B) Gifts are only included in the balance of payments if the gift is given to a government official. C) Gifts are included in the balance of payments. D) Gifts given to U.S. citizens are not included in the balance of payments but gifts given to foreigners are included.
OutputMarginal RevenueMarginal Cost0----1$16$142169316154162151628Refer to the above data. This firm is selling its output in a(n):
A. purely competitive market. B. oligopolistic market. C. monopolistic market. D. monopolistically competitive market.
Refer to Figure 27-4. In the graph above, suppose the economy is initially at point A. The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by Congress and the president?
A) an increase in the marginal income tax rate B) an open market purchase of Treasury bills C) an increase in interest rates D) an increase in transfer payments
It is argued that the market will
A. not produce a nonexcludable public good. B. produce the socially optimal output of a nonexcludable public good. C. produce too much of a nonexcludable public good. D. produce a nonexcludable public good if marginal social benefits are equal to marginal private benefits. E. b and d