A Report on the EU Economic Stimulus Plan Suggested That

question 41

Multiple Choice

A report on the EU economic stimulus plan suggested that "... Governments must consider ... cutting VAT [value added tax] and labor taxes ..." The VAT is similar to a sales tax. If governments follow the suggestions, there will be ________ according to the supply-side view.

• A) an increase in labor supply and a decrease in the tax wedge
• B) an upward shift in the aggregate production function
• C) an increase in the labor supply and an increase in the tax wedge
• D) an increase in saving and an increase in the tax wedge

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Definitions:

Caution Signals

Indicators or signs that alert individuals to potential hazards or the need for careful attention.

Disagreement Signals

Non-verbal or verbal cues indicating a difference in opinion or objection between individuals.

Sales Presentation

A formal talk or demonstration given by a salesperson to showcase a product or service's features and benefits, aiming to persuade potential buyers.

Nonverbal Signals

Nonverbal signals are forms of communication without words, such as body language, gestures, facial expressions, and tone of voice, which convey feelings or intentions.