According to the Laffer curve, an increase in the tax rate may decrease tax revenues.
Answer the following statement true (T) or false (F)
True
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The simple fiscal policy multiplier occurs in the IS-LM model when ________ interest responsiveness of money demand produces a ________ LM curve
A) zero, vertical B) zero, horizontal C) infinite, vertical D) infinite, horizontal
The market for money is in equilibrium
A) only if the non-money asset market is in equilibrium. B) whenever the economy is at potential GDP. C) when the cyclical unemployment rate is zero. D) the Fed achieves its target for the expected inflation rate.
The inclusion of external costs in the decision making process determining equilibrium price and quantity leads to
A) lower priced items and increased quantity. B) lower priced items and a decline in quantity. C) higher priced items and increased quantity. D) higher priced items and a decline in quantity.
Refer to the above table. How many workers will this firm hire if the weekly wage rate is $770?
A) 26 B) 27 C) 28 D) 29