Suppose that the government imposes a tax on firms for money wages they pay. How would this change the classical aggregate supply curve? Why?
What will be an ideal response?
The tax would effectively increase the money wage, requiring the marginal product of labor to rise and the quantity of labor to fall. This would shift the aggregate supply curve to the left.
Economics
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Describe how actual reserves are calculated and explain the difference between desired reserves and excess reserves. How do reserves affect the amount of loans a bank can make?
What will be an ideal response?
Economics
Which of the following statements is true? a. Economic profits ignore implicit costs
b. Economic profits include implicit costs. c. Accounting profits include all of the opportunity costs. d. Economists consider sunk costs in their decision making.
Economics