Any Policy Change That Reduced the Natural Rate of Unemployment

question 13

Multiple Choice

Any policy change that reduced the natural rate of unemployment

• A)would shift the long-run Phillips curve to the right.
• B)would shift the long-run aggregate-supply curve to the right.
• C)would be a policy change that impeded the functioning of the labor market.
• D)All of the above are correct.

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Definitions:

Tax Deductions

Expenses that can be subtracted from gross income to reduce the amount of income that is subject to income tax.

Double Taxation

A taxation principle where income taxes are paid twice on the same source of earned income, property, or financial asset.

Saving Rate

The proportion of disposable income that is saved rather than spent by households.

Tax Base

The total amount of assets or income that can be taxed by a governing authority, forming the essential revenue source.