Author Question: If incomes were equal in an economy can you think of any other problems that might exist as a result ... (Read 21 times)

schs14 · **on:** Jun 29, 2018

If incomes were equal in an economy can you think of any other problems that might exist as a result of this equality?

What will be an ideal response?

Question 2

Which of the following best describes supply-side economics?

A) Education affects the incentive to work, save, and invest and, therefore, aggregate supply.
B) Tax rates, particularly marginal tax rates, affect the incentive to work, save, and invest and, therefore, aggregate supply.
C) Labor productivity affects aggregate supply.
D) Education affects labor productivity which affects aggregate supply.

nhea · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

First of all the total level of economic activity is likely to be much lower than it otherwise would be. This is because an equality of income will provide little incentive for individual members of the society to try to improve their own lot. A lower level of total economic activity will mean that per capita production will likely be much lower

Answer to Question 2

B