A government proposal to increase marginal tax rates on the wealthiest 2 percent of U.S. residents is supposed to generate an additional $100 billion in tax revenues. It is likely that
A) the actual revenue raised will exceed the $100 billion, because the other 98 percent of the population will increase their work effort with a more fair tax system.
B) the actual revenue raised will be more than $100 billion, because the short-run aggregate supply curve is upward sloping.
C) the actual revenue raised will be close to $100 billion, because the wealthy don't respond to work incentives the way poorer workers do.
D) the actual revenue raised will be less than $100 billion, because some of the people will respond by working less and earning less income that can be taxed.
D
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The basic aggregate demand and aggregate supply curve model helps explain ________ fluctuations in real GDP and the price level
A) short-term B) long-term C) both short-term and long-term D) unrelated
In Keynes's view, an excess quantity of money supplied causes people to:
A. sell bonds and the interest rate rises. B. buy bonds and the interest rate falls. C. buy bonds and the interest rate rises. D. increase speculative balances.