According to the Neoclassical Model, What Would Not Result from the Government

question 16

Multiple Choice

According to the neoclassical model, what would not result from the government levying a tax on firms for each worker the firm lays off?

• A) Firms would be less likely to lay off workers.
• B) Firms would be less likely to hire workers.
• C) Moral hazard would encourage workers to not work as hard as before.
• D) The long-run unemployment rate would decrease.
• E) Unemployed workers would remain unemployed for longer periods of time.

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Definitions:

Absolute Income Gap

The difference in total income or earnings between individuals, households, or countries, measured without adjusting for living costs or other factors.

Real Income Per Capita

The average income per person in a country, adjusted for inflation, which reflects the purchasing power and economic well-being of the population.

Growth Rate

The percentage change of a specific variable within a specified time period, often used to describe the increase in population, revenue, or other significant measures.

Life Expectancy

The average number of years an individual is expected to live, based on current mortality rates and health conditions.