A decrease in the effective tax rate on capital would cause the IS curve to
A. shift up and to the right.
B. shift down and to the left.
C. remain unchanged.
D. remain unchanged if taxes are fully deductible from income; otherwise, shift up and to the right.
Answer: A
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Increasing the income tax rate ________ the ________
A) does not change; supply of labor B) decreases; supply of labor C) increases; supply of labor D) decreases; demand for labor E) increases; demand for labor
Based on the figure above, the firm's marginal product curve slopes upward at levels of output between ________ and the firm's average product curve slopes upward at levels of output between ________
A) 4.0 and 7.0; 4.0 and 7.0 B) 0 and 7.0; 4.0 and 7.0 C) 4.0 and 7.0; 0 and 4.0 D) 0 and 4.0; 0 and 7.0 E) More information is needed to answer the question.
Which of the following countries does not come close to the free market benchmark?
A) Cuba B) Japan C) the United States D) France