According to the Real Business Cycle Theory, During a Recession

question 49

Multiple Choice

According to the real business cycle theory, during a recession the demand for labour ________ and the supply of labour ________.

• A)increases; decreases
• B)decreases; does not change
• C)does not change; decreases
• D)decreases; decreases
• E)decreases; increases

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Definitions:

Property Taxes

Taxes paid by owners of property such as land, buildings, and in some cases, personal property, based on the value of the property.

Regressive

A term often used to describe taxes or policies that take a higher percentage from low-income earners than from high-income earners, considered inversely proportional to income.

Tax Incidence

The analysis of the effect of a particular tax on the distribution of economic welfare among entities in the economy.

Tax Rate

The rate at which taxes are applied to the income of a person or a company.