All other things held constant, lower marginal (income) tax rates
A) necessarily increase tax revenues.
B) necessarily decrease tax revenues.
C) decrease the attractiveness of productive activities relative to leisure and tax- avoidance activities, and shift the SRAS curve rightward.
D) do not affect the attractiveness of productive activities relative to leisure and tax- avoidance activities and therefore the SRAS does not shift rightward or leftward.
E) increase the attractiveness of productive activities relative to leisure and tax- avoidance activities and shift the SRAS curve rightward.
E
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The presence of correlated error terms creates problems for inference based on OLS. These can be overcome by
A) using HAC standard errors. B) using heteroskedasticity-robust standard errors. C) reordering the observations until the correlation disappears. D) using homoskedasticity-only standard errors.
The "invisible hand" described by Adam Smith refers to the
a. allocative role of markets and market forces b. importance of government intervention and central planning c. actions of successful entrepreneurs in directing the economy d. role of monopolized industries in leading the nation e. value of religious belief in creating an ideal economy