If tax reduction and simplification are effective, then
A) real wages will rise as labor supply and demand increase.
B) economic efficiency will increase.
C) interest rates will rise in financial markets and demand for financial assets falls.
D) fewer new firms will be established, since existing firms will make more profit.
Answer: B
You might also like to view...
According to this Application, the policies used by the European Union to support the agricultural sectors of its member countries created excess supply. Excess supply can be generated if a government establishes a
A) price ceiling above the market equilibrium price. B) price ceiling below the market equilibrium price. C) price floor above the market equilibrium price. D) price floor below the market equilibrium price.
Suppose initially that the working-age population is 220 million, the labor force is 150 million, and the official U-3 unemployment rate is 10 percent
5 million new jobs are created and filled by 5 million people who had previously been discouraged workers. What is the new U-3 unemployment rate? A) 6.25 percent B) 6.7 percent C) 9.7 percent D) 8.7 percent
For a good to be nonrival, then
A) one person's consumption of that good does not decrease another person's consumption of that good. B) a person cannot be prevented from consuming that good even if he or she did not pay for it. C) a person is willing to pay any price to ensure that the product is available. D) a person is not willing to pay for the good because even without paying for it, the person can consume the good anyway.
Sarah gets a salary increase. Before her raise, she purchased 5 pounds of fish and 1 pound of beef stew a month. After her raise, she consumes 2 pounds of fish and 3 pounds of beef stew a month. If everything else is held constant, we know that
A) fish is an inferior good and beef stew is a normal good for Sarah. B) fish is a normal good and beef stew is an inferior good for Sarah. C) both fish and beef stew are normal goods for Sarah. D) both fish and beef stew are inferior goods for Sarah.