According to the Laffer curve, when the tax rate is 100 percent, tax revenue will be
a. 0
b. at a maximum
c. the same as they would be at a 50 percent tax rate
d. greater than they would be at a 50 percent tax rate
e. the same as they would be at a 20 percent tax rate
A
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Internal economies of scale arise when the cost per unit
A) falls as the average firm grows larger. B) rises as the industry grows larger. C) falls as the industry grows larger. D) rises as the average firm grows larger. E) remains constant over a broad range of output.
The classical theory of aggregate supply where markets are perfectly flexible
a. may or may not be compatible with the Keynesian system. b. is easily added the IS-LM framework of aggregate demand. c. is fundamentally incompatible with the Keynesian system. d. is consistent with the IS-LM framework if all shocks are to the IS curve. e. none of the above.