Author Question: At the competitive equilibrium with a positive proportional labor income tax A) the real wage ... (Read 77 times)

Davideckstein7 · **on:** Jun 30, 2018

At the competitive equilibrium with a positive proportional labor income tax

A) the real wage after tax exceeds the marginal product of labor.
B) the real wage after tax equals the marginal product of labor.
C) the real wage after tax is lower than the marginal product of labor.
D) We cannot say.

Question 2

When an aggregate demand shock hits the economy ________.

A) there is no conflict for the central bank between pursuing price or output stability because of the divine coincidence
B) the same long-run equilibrium real interest rate is reached whether the central bank intervenes or not
C) the long-run level of output is unaffected
D) all of the above
E) none of the above