What effect would each of the following government actions have on the steady-state growth rate of the standard of living? a. a decrease in income tax rates b. a doubling of the capital gains tax c. a growing budget deficit d
an increase in funding for research and development at public universities
a. A decrease in income tax rates will increase the amount of household saving and should increase the steady-state growth rate.
b. A doubling of the capital gains tax should decreases the incentive for firms to accumulate capital and should decrease the steady-state growth rate.
c. A growing budget deficit should decrease the national saving rate and the steady-state growth rate.
d. An increase in funding for R&D for public universities will increase the rate of technological change and should increase the steady-state growth rate.
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A buyer's investment value is the __________ that he or she would be willing to pay for a particular property.
Fill in the blank(s) with the appropriate word(s).
What assumption is used when making demand curves?
a. All economic factors remain constant except price. b. All consumers lie about their purchasing habits. c. Inflation always causes product prices to rise. d. Availability of product is the most important variable.