In the Long Run an Increase in the Marginal Tax

question 29

Multiple Choice

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

• A)decreases GDP.
• B)increase the capital stock.
• C)raises consumption.
• D)all of the above.

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Definitions:

Pay

Monetary compensation given to employees for their labor or services, often determined by factors such as skill level, industry standards, and organizational policies.

Motivator

An internal or external factor that stimulates individuals to act in a certain way or to pursue particular goals.

Wage Incentive Plans

Various systems that link pay to performance on production jobs.

Restriction of Productivity

Any factor or practice that limits or hinders the efficiency and effectiveness of production processes, thereby reducing overall productivity.