If Tax Reduction and Simplification Are Effective, Then

question 31

Multiple Choice

If tax reduction and simplification are effective, then

• A)real wages will rise as labour supply and demand increase.
• B)saving and investment in new capital will increase.
• C)interest rates will rise in financial markets and demand for financial assets will fall.
• D)fewer new firms will be established, since existing firms will make more profit.
• E)government revenue will increase.

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Definitions:

Loan Price

The total financial cost of borrowing, including interest rates and any additional fees charged by the lender.

Crop Price

The market value at which a crop is traded, determined by supply and demand factors.

Countercyclical Payments

These are payments made by the government to producers, primarily in the agriculture sector, to buffer them against falling market prices and to support income stability across economic cycles.

Food, Conservation, And Energy Act

Also known as the 2008 Farm Bill, it's legislation focusing on agriculture policy, including food aid, conservation, and energy.