Reference no: EM13900613
Taxes, oil prices, and workers
Everyone in the labor force is concerned with two things: whether they have a job and, if so, their after-tax income from that job (i.e., their after-tax real wage). An unemployed worker may also be concerned with the availability and amount of unemploy- ment benefits, but we will leave that issue aside for this problem.
a. Suppose there is an increase in oil prices. How will this affect the unemployment rate in the short run and the medium run? How will it affect the real wage (W/P)?
b. Suppose there is a reduction in income taxes. How will this affect the unemployment rate in the short run and the me- dium run? How about the real wage? For a given worker, how will after-tax income be affected?
c. According to our model, what policy tools does the gov- ernment have available to increase the real wage?
d. During 2003 and 2004, oil prices increased more or less at the same time that income taxes were reduced. A popular joke at the time was that people could use their tax refunds to pay for the higher gas prices. How do your answers to this problem make sense of this joke?
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Record the cost of the new sprinkler system on january
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What will the inflation rate be in years
: Using the information in this chapter, label each of the fol- lowing statements true, false, or uncertain. Explain briefly. The original Phillips curve is the negative relation between unemployment and inflation that was first observed in the Un..
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Hamara systems most recently reconciled its bank balance
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Record the purchase of the temporary investments for cash
: During 2006, its first year of operations, Lyon Research Corporation purchased the following securities as a temporary investment. Record the purchase of the temporary investments for cash.
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How will this affect the unemployment rate in the short run
: Suppose there is a reduction in income taxes. How will this affect the unemployment rate in the short run and the medium run? How about the real wage? For a given worker, how will after-tax income be affected?
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How do output and the price level in the short run
: What should the Fed do to prevent the unemployment rate from changing in the short run? Show how the Fed's action, combined with the decline in business confidence, affects the AS-AD diagram in the short run and the medium run.
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Determine the net after-tax unrealized gain or loss
: Determine the net after-tax unrealized gain or loss from holding the Lambert Acres com- mon stock for 2006 and 2007. What is the balance of Accumulated Other Comprehensive Income or Loss for December 31, 2006?
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Prepare the stockholders equity section of the balance sheet
: Prepare a statement of comprehensive income for 2006. Prepare the Stockholders' Equity section of the balance sheet for December 31, 2006.
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Similarities and differences of the moral characteristics
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