Which combination of government policies would be most likely to increase labor supply?
a. Increasing income tax rates and cutting transfer payments to the needy
b. Decreasing income tax rates and cutting transfer payments to the needy
c. Decreasing income tax rates and increasing subsidies to businesses for hiring certain kinds of workers
d. Increasing income tax rates and cutting subsidies to business
e. Cutting transfer payments to the needy and increasing subsidies to business
B
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A good is rival in consumption if:
a. the supplier of that good can prevent people who do not pay from consuming it. b. the supplier of that good cannot prevent people who do not pay from consuming it. c. the same unit of the good cannot be consumed by more than one person at the same time. d. there is no free-rider problem.
Which of the following is an example of the law of one price?
A. Because their countries have similar institutions, computer programmers in Germany and the United States either are or will be paid about the same. B. Because people have essentially the same basic needs wherever they live, they tend to buy the same bundle of goods. C. Exchange rates tend to have equivalent values. For example, one euro equals one U.S. dollar. D. Because wages are so much lower in China, eventually all U.S. jobs will be outsourced to China, leaving the United States to import all goods at one price.