In the Long Run an Increase in the Marginal Tax

question 27

Multiple Choice

In the long run an increase in the marginal tax rate on asset income, _r, in the market clearing model:

• A)increases the stock of capital and real GDP.
• B)increases the stock of capital and decreases real GDP.
• C)decreases the stock of capital and real GDP.
• D)decreases the stock of capital and increases real GDP.

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Definitions:

Epileptic Seizures

Episodes of abnormal electrical activity in the brain, leading to various symptoms such as convulsions, sensory disruptions, or loss of consciousness.

Nondeclarative Memories

Memories that are retained and retrieved without conscious awareness, often involving skills and habits.

Stress Hormone

Hormones that are released into the body in response to stress, including cortisol and adrenaline, which prepare the body for a fight or flight response.

Cortisol

A steroid hormone released by the adrenal glands in response to stress or low blood-glucose concentration; it plays an essential role in stress response, metabolism, and immune response.