Holding other factors constant, an increase in the tax rate on revenue generated by capital will:
A. decrease national saving.
B. increase national saving.
C. increase investment.
D. decrease investment.
Answer: D
You might also like to view...
As the result of an increase in the price of capital, the demand for labor would ________, the supply of labor would ________, and the quantity of labor hired would ________
A) decrease; remain the same; decrease B) decrease; decrease; decrease C) decrease; increase; remain the same D) increase; remain the same; decrease
A firm produces output according to the production function, q = L4/3K1/2 and faces input prices equal to w = $20 and r = $80. What is the minimum cost of producing 1140 units of output?
A) Cost = $780. B) Cost = $694 C) Cost = $2,071. D) Not enough information is given to answer this problem.
Which of the following policies would increase the demand for loanable funds and thus investment spending?
a. A reduction in the investment tax credit. b. An increase in the corporate profits tax. c. A reduction in the capital gains tax. d. An increase in the investment tax credit. e. An increase in transfer payments.
Suppose that a tariff is imposed on imported cheese. This will have the effect of __________ the quantity consumed of cheese, __________ consumers' surplus, and __________ the government's tariff revenues
A) increasing; increasing; increasing B) decreasing; decreasing; increasing C) increasing; decreasing; decreasing D) decreasing; increasing; increasing E) decreasing; increasing; decreasing