If We Include Consideration of Potential Effects of a Proposed

question 146

Multiple Choice

If we include consideration of potential effects of a proposed tax reduction and simplification on the labor supply,we would expect crowding out of investment and net exports brought about by the tax cut to be

• A)less than it would be without the supply-side effects.
• B)increased as aggregate real income and output rise in the long run.
• C)unaffected by the shifting long-run aggregate supply curve.
• D)dependent upon the impact of this tax change on consumer disposable income.

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Definitions:

Psychologists

Professionals specializing in the science of behavior and mind, embracing all aspects of conscious and unconscious experience as well as thought.

Basic Emotions

Fundamental emotions that are hard-wired in humans since birth and universally recognized, including joy, surprise, sadness, anger, fear, and disgust.

Psychologists

Professionals who study mental processes and behavior by observing, interpreting, and recording how people relate to one another and to their environments.

Cultural Variations

Differences in practices, beliefs, and values among cultures, affecting behaviors, traditions, and ways of life.