The government increases the corporate profits tax. As a result, corporate profits decrease. This will
A. decrease the nonlabor income of households, causing consumption to decrease and labor supply to decrease or increase depending on the relative magnitude of the income and substitution effects.
B. decrease the nonlabor income of households, causing consumption to decrease and labor supply to decrease.
C. have no effect on households.
D. decrease the nonlabor income of households, causing consumption to decrease and labor supply to increase.
Answer: D
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Structural unemployment is
A) associated with the changing of jobs in a dynamic economy. B) associated with general downturns in the economy. C) associated with changes in technology that change required job skills. D) very short-term unemployment.
Looking at the _________ approach to GDP accounting, the largest component of GDP in 2003was _______
a. expenditure; government purchases b. national; proprietor's income c. national income; net interest d. expenditure; personal consumption expenditures e. expenditure; compensation of employees
The first year of the Bush administration in 2001 could be represented as a(n)
a. increase in the aggregate demand curve. b. decrease in the aggregate demand curve. c. increase in the aggregate supply curve. d. decrease in the aggregate supply curve.
Falling output, in the short run, could be due to:
A. an increase in short-run aggregate supply. B. a reduction in aggregate demand. C. an increase in long-run aggregate supply. D. an increase in aggregate demand.