Question 1.12: Taxes on labor income The government lowers the tax rate on labor but government spending G does not change; transfers V fall by the amount of the new tax. What are the effects on the supply and demand curves for labor? (The labor supply and demand curves have labor on the horizontal axis and the real wage rate on the vertical axis.) AB E Labor Supply Curve shifts left shifts left shifts right does not change does not change Labor Demand Curve shifts right does not change does not change shifts right shifts left Question 1.13: Growth rate of capital per worker An economy follows a Solow growth model with no technological progress. In 20XX (not the steady state) s = savings rate = 26.08% y = income per worker = 270 units per worker per annum k = capital per worker = 870 units per worker n = population growth rate = 2.26% per annum 8 = annual depreciation rate of capital = 3.20% What is the annual growth rate of capital per worker for 20XX? A. 5.00% B. 5.15% C. 5.30% D. 5.45% E. 5.60%

Question 1.12: Taxes on labor income The government lowers the tax rate on labor but government spending G does not change; transfers V fall by the amount of the new tax. What are the effects on the supply and demand curves for labor? (The labor supply and demand curves have labor on the horizontal axis and the real wage rate on the vertical axis.) AB E Labor Supply Curve shifts left shifts left shifts right does not change does not change Labor Demand Curve shifts right does not change does not change shifts right shifts left Question 1.13: Growth rate of capital per worker An economy follows a Solow growth model with no technological progress. In 20XX (not the steady state) s = savings rate = 26.08% y = income per worker = 270 units per worker per annum k = capital per worker = 870 units per worker n = population growth rate = 2.26% per annum 8 = annual depreciation rate of capital = 3.20% What is the annual growth rate of capital per worker for 20XX? A. 5.00% B. 5.15% C. 5.30% D. 5.45% E. 5.60%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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