Suppose the government reduces the corporate income tax rate. This will increase the return to firms for investing, which should decrease /have no affect on /increase investment and cause no change/a decrease/ an increase in capital in the long run.
As a result of the corporate tax cut, the long-run aggregate supply curve will shift to the right /remain unchanged/shift to the left.
The new long-run equilibrium will be
A. anywhere along the original long-run aggregate supply curve.
B. where the aggregate demand curve intersects the new long-run aggregate supply curve.
C. anywhere along the aggregate demand curve.
D. where the aggregate demand curve intersects the originallong-run aggregate supply curve.
The long-run impact of a reduction in corporate tax rates would be
A. an increase in long-run potential output while creating additional upward movements in prices.
B. an increase in long-run potential output while actually reducing inflation.
C. a decrease in long-run potential output while actually reducing inflation..
D. an decrease in long-run potential output while creating additional upward movements in prices
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Suppose the government reduces the corporate income tax rate. This will increase the return to firms...
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