The Keynesian economists do not believe that a cut in the marginal income tax rate will have strong effects on aggregate supply because they
a. do not believe that business investment will respond strongly to changes in the after-tax rate of return to capital.
b. do not believe that labor supply will respond strongly to changes in the after-tax real wage.
c. do not believe that labor demand will respond strongly to a change in the after-tax real wage.
d. believe monetary policy will be too restrictive to allow strong output growth.
B
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Leaving the labor force or finding a job are two ways that:
A. an unemployment spell can begin. B. a person can become an involuntary part-time worker. C. a person can become a discouraged worker. D. an unemployment spell can end.
Which of the following statements concerning the relationships among the firm's total cost functions is false?
A) TC = TFC + TVC B) TVC = TFC - TC C) TFC = TC - TVC D) TC = TFC when output = 0.
According to the law of one price, if the price of Colombian coffee is 100 Colombian pesos per pound and the price of Brazilian coffee is 4 Brazilian reals per pound, then the exchange rate between the Colombian peso and the Brazilian real is
A) 40 pesos per real. B) 100 pesos per real. C) 25 pesos per real. D) 0.4 pesos per real.
Which of the following would best encourage investment in human capital?
a. Higher marginal tax rates on labor income b. Higher interest rates c. Expansion of college loan programs d. A decrease in the wage gap between high school and college-educated workers e. A reduction in life expectancy that encourages earlier retirement