Which economists believe a decrease in marginal tax rates will ultimately cause the economy to move from point B to point D in Figure 18.3?
A. Modern Keynesians.
B. Supply-siders.
C. Monetarists.
D. Keynesians.
Answer: B
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What will be an ideal response?
That most used cars are sold by intermediaries (i.e., used car dealers) provides evidence that these intermediaries
A) have been afforded special government treatment, since used car dealers do not provide information that is valued by consumers of used cars. B) are able to prevent potential competitors from free-riding off the information that they provide. C) have failed to solve adverse selection problems in this market because "lemons" continue to be traded. D) have solved the moral hazard problem by providing valuable information to their customers.
Road pricing will improve the allocation of resources to transportation
Indicate whether the statement is true or false
Over the long run if central banks want to avoid high rates of inflation, they need to be concerned with the:
A. unemployment rate. B. real economic growth rate. C. money growth rate. D. productivity of labor.