Supply-side theory asserts that high marginal tax rates
A. raise additional tax revenues.
B. encourage private saving.
C. encourage business investment.
D. discourage work effort.
Answer: D
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
If tuition at a college is $30,000 and the external benefit of graduating from this college is $10,000, then
i. in the absence of any government intervention, the number of students graduating is less than the efficient number. ii. the government could increase the number of graduates by giving the college a $10,000 subsidy per student. iii. the government could increase the number of graduates by giving the students $10,000 vouchers. A) i only B) i and ii C) i and iii D) ii and iii E) i, ii, and iii
If you are told that in a given year the real growth rate is 7% with inflation and population growth rates of 2% and 1.2% respectively, then nominal growth rate of GDP per capita is:
A. 3.8%. B. 5.0 %. C. 5.8%. D. 7.0 %.
When the flow of money from the foreign countries to the domestic firms equals the flow of money from the home country to the foreign firms, _____
a. a trade surplus exists b. an equal amount of agricultural and manufactured products are exported c. a trade deficit exists d. an equal amount of goods and services are imported e. the value of net exports is zero