If the government increases the income tax rate, consumers have:
A. less to spend and will reduce their consumption.
B. more to spend and will reduce their consumption.
C. less to spend and will increase their consumption.
D. more to spend and will increase their consumption.
A. less to spend and will reduce their consumption.
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Suppose a farmer raising beef is making a normal profit. Then, because of a scare about mad cow disease, the demand for beef decreases drastically. What happens to the profits of the beef farmer in the short run and in the long run?
What will be an ideal response?
The Great Depression that started in 1929 was
A) confined only to the United States. B) confined only to the United States and Britain. C) confined only to the United States and Europe. D) a global phenomenon. E) confined only to the Americas.
At the time of Kelsey's 20 year high school reunion she was earning $50,000 and the CPI was 120. Now that it is time for her to attend her 30 year high school reunion, Kelsey's income has risen to $97,000 and the CPI is 230. At her 30 year reunion, can Kelsey rightfully brag that her real income has risen since the last time she saw her former classmates ten years ago?
A) Yes, Kelsey's real income rose during that 10 year period. B) No, Kelsey's real income fell during that 10 year period. C) No, Kelsey's real income remained constant during that 10 year period. D) It is impossible to determine what happened to Kelsey's real income.
Based on our understanding of the labor market model presented in Chapter 6, we know that an increase in the markup will cause
A) an increase in the equilibrium real wage. B) a reduction in the equilibrium real wage. C) a reduction in the natural rate of unemployment. D) both B and C