Which of These Is Specifically Designed to Increase the Long-Run

question 306

Multiple Choice

Which of these is specifically designed to increase the long-run aggregate supply curve?

• A) raising marginal tax rates on income
• B) developing new technologies
• C) increasing government spending on welfare
• D) increasing taxes on entrepreneurs

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Definitions:

Placebo Effect

The phenomenon that occurs in an experiment when a participant’s response to a treatment is due to his or her expectations about the treatment rather than to the treatment itself.

Sugar Pill

A placebo, often used in medical trials to test the efficacy of new drugs by comparing their effects to those of an inert pill.

Drowsy

A feeling of being sleepily tired and lethargic, not fully awake, often as a prelude to falling asleep.

Random Assignment

The process of selecting participants for experimental and control groups by using a chance procedure to guarantee that each participant has an equal probability of being assigned to any of the groups; a control for selection bias.