If the tax doubles to $24, the distortion
Suppose the supply of labor is W – t = 10H, where W is the gross wage, t is the tax (in dollars), and H is labor hours. The demand for labor is W = 120 – 2H.
a) declines
b) remains the same
c) doubles
d) triples
e) quadruples
e) quadruples
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Suppose an economy experiences a permanent increase in its natural unemployment rate. This change leads to
A) a downward movement along the short-run Phillips curve. B) a leftward shift of the short-run Phillips curve. C) a rightward shift of the short-run Phillips curve. D) an upward movement along the short-run Phillips curve. E) no change in the short-run Phillips curve.
The most common type of macroeconomic imbalance is overly expansionary fiscal policies that create large government budget deficits, often financed by a high growth rate of the money supply
Indicate whether the statement is true or false