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

Ange in supply or (ii) a movement along the supply curve. a. during a real estate boom that causes house prices to rise, more homeowners put their houses up for sale. b. many strawberry farmers open temporary roadside stands during harvest season, even though prices are usually low at that time. c. immediately after the school year begins, fewer young people are available to work. fast-food chains must raise wages, which represent the price of labor, to attract workers. d. many construction workers temporarily move to areas that have suffered hurricane damage, lured by higher wages. e. since new technologies have made it possible to build larger cruise ships (which are cheaper to run per passenger), caribbean cruise lines have offered more cabins, at lower prices, than before. 2. in the following three situations, the market is initially in equilibrium. after each event described below, does a surplus or shortage exist at the original equilibrium price? what will happen to the equilibrium price as a result? a. in 2010 there was a bumper crop of wine grapes. b. after a hurricane, florida hoteliers often find that many people cancel their upcoming vacations, leaving them with empty hotel rooms. c. after a heavy snowfall, many peop