If the Supply of Savings Is Not Perfectly Elastic, the Corporate

question 30

Multiple Choice

If the supply of savings is not perfectly elastic, the corporate income tax is likely to:

• A)increase investment.
• B)decrease investment.
• C)increase the supply of labor.
• D)decrease the supply of labor.

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Definitions:

Incentives

Rewards or motivations provided to encourage specific behaviors or actions.

Learning

The method of obtaining new comprehension, knowledge, conduct, capabilities, beliefs, or inclinations.

Homeostasis

The process by which living organisms maintain a stable internal environment to function effectively, despite external changes.

Drive-reduction Theory

A theory of motivation that proposes an individual's behavior is an external display of the desire to satisfy physiological needs.