The U.S. economy has seen a faster increase in productivity since the mid-1990s as compared to the economies of many Western European countries. Which of the following explains this?
A) The United States has a higher rate of job mobility than do many Western European countries.
B) U.S. unions impose stricter work rules as compared to unions in Western European countries.
C) U.S. government regulations impose stricter work rules as compared to government regulations in Western Europe.
D) U.S. workers can obtain unemployment insurance for a longer period of time as compared to workers in most Western European countries.
Question 2
A change in tax rates
A) has a larger multiplier effect the smaller the tax rate.
B) has a less complicated effect on GDP than does a tax cut of a fixed amount.
C) will not affect disposable income.
D) will not affect the size of the multiplier.
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