An increase in the average tax rate, with the marginal tax rate held constant, will
A. increase the amount of labor supplied at any real wage.
B. not affect the amount of labor supplied at any real wage.
C. decrease the amount of labor supplied at any real wage.
D. increase the amount of labor supplied at any real wage if the average tax rate is above the marginal tax rate, but decrease the amount of labor supplied at any real wage if the average tax rate is below the marginal tax rate.
Answer: A
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If the demand curve is less elastic than the supply curve, then:
A. the buyers will bear a greater tax incidence. B. the sellers will bear a greater tax incidence. C. the buyers will bear a smaller tax burden than sellers. D. the sellers will bear a greater tax burden than buyers.
Suppose, as in the 1970's in the U.S., that demographic groups which typically have higher unemployment rates become a larger percentage of the labor force. Would this have any effect on the long-run Phillips curve?
Suppose that Canada pegs its dollar to the U.S. dollar at a rate of $C1 = $US1 and that Canada is a major exporter of crude oil to the United States. The increase in the price of oil that occurred in the second half of 2007 is likely to:
A) cause asymmetric shocks to the U.S. and Canadian economies that will make it difficult for Canada to maintain the $C1 = $US1 exchange rate. B) cause symmetric shocks to the U.S. and Canadian economies that will make it difficult for Canada to maintain the $C1 = $US1 exchange rate. C) cause asymmetric shocks to the U.S. and Canadian economies and make it easier for Canada to maintain the $C1 = $US1 exchange rate. D) cause symmetric shocks to the U.S. and Canadian economies and make it difficult for Canada to maintain the $C1 = $US1 exchange rate.
A lower price elasticity of demand coefficient occurs when:
A. many substitutes exist. B. the quantity demanded is more responsive. C. few substitutes exist. D. the market is broadly defined.