If the real marginal tax rate increases in the market clearing model then:
a. the supply of labor decreases.
b. real output, Y, declines.
c. the demand for capital decreases.
d. all of the above.
Answer: d. all of the above.
You might also like to view...
Workers laid off as a result of a recession suffer
A) structural unemployment. B) seasonal unemployment. C) natural unemployment. D) cyclical unemployment. E) frictional unemployment.
If a firm in Thailand borrows dollars from a U.S. bank, its interest payments on the loan in bahts will decrease if the baht appreciates against the dollar
Indicate whether the statement is true or false
In 1980, the U.S. budget was ________, private saving was ________ domestic investment, and foreign borrowing was ________
A) in deficit, higher than, not needed to finance deficit B) balanced, roughly equal to, not needed to finance deficit C) balanced, less than, substantial. D) surplus, greater, negligible
The supply of human capital to a particular use is
a. perfectly inelastic in the short run. b. perfectly elastic in the long run. c. more inelastic in the short run since it takes time for persons to acquire a particular skill. d. more elastic in the short run since individuals who already possess the particular skill can be attracted into the labor force in the short run.