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According to supply-side economists, as tax rates are reduced, labor supply should increase. This implies that ?

A. there is no income effect when tax rates are changed

B. the income effect of a wage change is greater than the substitution effect of a wage change.

C. there is no substitution effect when tax rates are changed

D. the substitution effect of a wage change is greater than the income effect of a wage change

Related Questions on Supply-Side Policies & Sources of Comparative Advantage Mcqs

Privatization is the transfer of ?

A. publicly held stock to private individuals

B. corporately owned businesses to individuals

C. government businesses to the private sector.

D. privately owned businesses to the government sector