F: A reduction in the marginal tax rate can cause potential output to increase b
ID: 1123528 • Letter: F
Question
F: A reduction in the marginal tax rate can cause potential output to increase by:
1: encouraging early entry into the labor market by reducing the incentive to earn advanced degrees.
2: increasing after-tax wage rates and thus allowing workers to work fewer hours.
3: increasing the incentive to invest more in education and earn advanced degrees.
4: increasing government revenues and thus government expenditure.
G: If the rate of inflation equals zero, then the real rate of interest:
1: equals zero.
2: equals the nominal rate of interest.
3: can be negative.
4: equals the target real interest rate.
H: The average tax rate is:
1: total taxes divided by total before-tax income.
2: the average tax rate divided by the total tax rate.
3: the amount taxes increase when before-tax income rises by an additional dollar.
4: the tax rate at which the benefit of an extra dollar of taxes equals the cost of an extra dollar of taxes.
I: A supply-side policy is a policy that:
1: shifts the short-run aggregate supply curve.
2: shifts the long-run aggregate supply curve.
3: shifts the aggregated demand curve.
4: prevents recessionary gaps that shift the AS curve.
J: Which of the following statements about inflation targeting is true?
1: Inflation targets have only been used in developed countries.
2: Inflation targets are always met.
3: Inflation targets have been used in both developed and developing countries.
4: Inflation targets increase uncertainty.
Explanation / Answer
F
increasing the incentive to invest more in education and earn advanced degrees.
the above is answer
G
equals the nominal rate of interes
the above is answer
H
total taxes divided by total before-tax income.
the above is answer
I
shifts the long-run aggregate supply curve.
the above is answer
J
Inflation targets have been used in both developed and developing countries.
the above is answer
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