What effect would each of the following government actions have on the steady-state growth rate of the standard of living? a. a decrease in income tax rates b. a doubling of the capital gains tax c. a growing budget deficit d
an increase in funding for research and development at public universities
a. A decrease in income tax rates will increase the amount of household saving and should increase the steady-state growth rate.
b. A doubling of the capital gains tax should decreases the incentive for firms to accumulate capital and should decrease the steady-state growth rate.
c. A growing budget deficit should decrease the national saving rate and the steady-state growth rate.
d. An increase in funding for R&D for public universities will increase the rate of technological change and should increase the steady-state growth rate.
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A. recession; peak; expansion B. recession; trough; expansion C. expansion; trough; recession. D. expansion; peak; recession
Price is important in a market economy because it
a. eliminates imbalances between supply and demand. b. serves as the rationing mechanism for the limited supplies of goods and services. c. coordinates the choices of consumers and producers and brings them into harmony. d. is all of the above.
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Most economists are against rent control because it
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