Why such tax cuts might not have the expected

Reference no: EM131773941

Question: Supply-side personal income tax cuts are expected to work by increasing work incentives. Which of the following explains why such tax cuts might not have the expected? effect?

A. Workers may use their increased real income to purchase more? leisure, and thus labor supply will not increase.

B. Firms will be able to reduce wages when income tax rates? fall, since real wages are now higher.

C. Workers do not respond to change in tax rates since they have to work anyway.

D. Firms will invest more and replace workers with capital when there are income tax cuts.

E. Since there are rational? expectations, it will be expected that tax cuts are only temporary.

Reference no: EM131773941

Questions Cloud

Evaluate the income tax consequences of having such property : Annie plans to give a cottage to her son to fulfill a promise made many years ago. She has owned the cottage for the past

What will the price-earnings ratio of the postmerger firm : Question - Effects of a Stock Exchange, What will the price-earnings ratio of the postmerger firm be if the market correctly analyzes the transaction

Calculate weekly total revenue : The campus barber faces stiff competition from the large number of shops that surround the campus area, and for all practical purposes the market is perfectly

What are the average variable costs of firm : At the end of the year, a firm produced 12,000 laptop computers. Its total costs were $6 million, and its fixed costs were $3 million.

Why such tax cuts might not have the expected : Supply-side personal income tax cuts are expected to work by increasing work incentives. Which of the following explains why such tax cuts might not have.

Most oil exporting nations tend to peg : Explain and demonstrate why it is the case that most oil exporting nations tend to peg their currency to US dollar. Give specific examples.

What will the price-earnings ratio be : If there are no synergy gains, what will the share price of A be after the merger? What will the price-earnings ratio be

Prepare all entries required to properly record the sale : Prepare all entries required to properly record the sale, Amortization is recorded when interest is received by the straight-line method

Carrying a second bucket down the hill : Carrying the pails of water down requires considerable effort. Both Jill and Jack would be willing to pay $2 each to avoid carrying one bucket

User Account

All Pages