An increase 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.
B
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If neither the demand nor supply of a good is perfectly elastic or inelastic, a tax on the good ________ consumer surplus and ________ producer surplus
A) decreases; decreases B) increases; increases C) decreases; increases D) increases; decreases E) decreases; does not change
Economies of scale: a. are the result of a diminishing marginal product
b. pertain to the long run only. c. refer to the increase in output that results from the increased utilization of a single input. d. imply that the average total cost curve will fall continuously as output increases in the short run.
A price ceiling will increase the amount that is traded in the market while a price floor will reduce the amount that is traded in the market
Indicate whether the statement is true or false
Which of the following is an example of a normative economic statement?
a. The inflation rate in the United States decreased from 4 percent last year to 3 percent this year as a result of lower energy prices. b. The economy grew at an annual rate of 5 percent during the first quarter of this year. c. If two automobile companies merge, it is likely that the price of automobiles will rise. d. An increase in international trade benefits some workers but hurts others. e. The minimum wage should be increased so that low income workers can afford to keep up with the cost of living.