When Taxes Are Included in the Stylized DSGE Model, with Cobb-Douglas

question 109

Multiple Choice

When taxes are included in the stylized DSGE model, with Cobb-Douglas production, labor demand is given by:

• A) \(w = ( 1 - \tau ) \cdot 2 / 3 \cdot \frac { \bar { A } K ^ { 1 / 3 } } { L ^ { 1 / 3 } }\)
• B) \(w = \bar { \ell } \cdot \frac { ( 1 - \tau ) w } { c }\)
• C) \(w = ( 1 - \tau ) \cdot 2 / 3\)
• D) \(w = ( 1 - \tau ) \cdot 2 / 3 \cdot L ^ { 1 / 3 }\)
• E) \(w = ( 1 - \tau ) \cdot 1 / 3 \cdot \frac { \bar { A } L ^ { 2 / 3 } } { K ^ { 2 / 3 } }\)

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Definitions:

Reinforcer

Any stimulus that strengthens or increases the probability of a specific response or behavior by providing a consequence an individual finds rewarding.

Desired Behavior

This refers to the specific actions or reactions that an individual or organization aims to elicit from another party.

Primary Reinforcers

Innate reinforcing qualities such as food, drink, and pleasure, which do not require learning to become effective in shaping behavior.

Contingent Reinforcement

A method where the provision of rewards or consequences is directly dependent on the display of specific behaviors.