« previous next »

Author Question: Suppose that the government imposes a tax on firms for money wages they pay. How would this change ... (Read 19 times)

leilurhhh

  • Hero Member
  • *****
  • Posts: 560
on: Jun 30, 2018
Suppose that the government imposes a tax on firms for money wages they pay. How would this change the classical aggregate supply curve? Why?
 
  What will be an ideal response?

Question 2

According to the new classical model,
 
  a. anticipated declines in aggregate demand would move output and employment below the full-employment levels.
  b. announced declines in aggregate demand do not change output and employment above the full-employment levels.
  c. anticipated declines in aggregate supply would only put employment below the full-employment level.
  d. unanticipated declines in aggregate demand would cause output and employment to fall below the full-employment levels.
  e. both c and d.


snackralk

  • Sr. Member
  • ****
  • Posts: 363
Reply #1 on: Jun 30, 2018
Answer to Question 1

The tax would effectively increase the money wage, requiring the marginal product of labor to rise and the quantity of labor to fall. This would shift the aggregate supply curve to the left.

Answer to Question 2

E


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

The term bacteria was devised in the 19th century by German biologist Ferdinand Cohn. He based it on the Greek word "bakterion" meaning a small rod or staff. Cohn is considered to be the father of modern bacteriology.

Did you know?

In the United States, congenital cytomegalovirus causes one child to become disabled almost every hour. CMV is the leading preventable viral cause of development disability in newborns. These disabilities include hearing or vision loss, and cerebral palsy.

Did you know?

Computer programs are available that crosscheck a new drug's possible trade name with all other trade names currently available. These programs detect dangerous similarities between names and alert the manufacturer of the drug.

Did you know?

Drug abusers experience the following scenario: The pleasure given by their drug (or drugs) of choice is so strong that it is difficult to eradicate even after years of staying away from the substances involved. Certain triggers may cause a drug abuser to relapse. Research shows that long-term drug abuse results in significant changes in brain function that persist long after an individual stops using drugs. It is most important to realize that the same is true of not just illegal substances but alcohol and tobacco as well.

Did you know?

Approximately 25% of all reported medication errors result from some kind of name confusion.

Bones change radically in size and shape from newborn to adult, as these cervical vertebrae demonstr Bones change radically in size and shape from newborn to adult, as these cervical vertebrae demonstr
The Revolutionary Change in the U.S Workforce The Revolutionary Change in the U.S Workforce
Natural Causes of Climate Change Natural Causes of Climate Change
Global Climate Change Global Climate Change
Economic objectives of firms Economic objectives of firms
Competitive firms and maximization Competitive firms and maximization
Video: Negative Feedback Regulation of Blood Pressure

For a complete list of videos, visit our video library