Which of the following would be considered a supply-side policy?
A. an increase in government regulations that require businesses to internalize pollution costs
B. decreasing taxes to increase the incentive to work
C. an increase in government spending that would lead to increased aggregate demand
D. increasing the amount of Social Security contributions paid by businesses to help fund the Social Security program
Answer: B
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The figure above shows the costs associated with producing paper. When paper is produced, there is some pollution runoff into a lake. The marginal private cost when output equals 2 tons of paper per week equals
A) $50 per ton B) $100 per ton. C) $150 per ton. D) None of the above answers is correct.
Because of the ________ of vaccinations, economic efficiency would be improved if more people were vaccinated
A) positive externality B) moral hazard C) adverse selection D) negative externality
When a primary dealer buys a government bond from the Federal Reserve, reserves in the banking system ________ and the monetary base ________, everything else held constant
A) increase; increases B) increase; decreases C) decrease; increases D) decrease; decreases
The degree of monopsony power that a firm enjoys is determined by
A) elasticity of market demand, elasticity of market supply, and number of buyers in the market. B) elasticity of market supply, number of buyers in the market, and how buyers interact. C) number of buyers in the market, how buyers interact, and number of sellers of the resource. D) how buyers interact, number of sellers of the resource, and elasticity of market demand.