Comparing the AS-AD model and the Phillips curve, we see that
A) they both are graphed as a relationship between the rate of inflation and the unemployment rate.
B) the AS-AD model uses the price level and the Phillips curve uses the rate of inflation.
C) the AS-AD model is graphed as a relationship between the inflation rate and the rate of real GDP.
D) the AS-AD model uses the price level and the Phillips curve uses real GDP.
E) the Phillips curve is graphed as a relationship between the price level and the unemployment rate.
B
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If the government increases the corporate income tax,
A) the user cost of capital declines and V* increases. B) the user cost of capital declines and V* decreases. C) the user cost of capital increases and V* decreases. D) the user cost of capital increases and V* increases.
Can government provision of a good result in its overproduction? Explain