Recall the Application about the government of Mexico City repainting highway lane lines to transform a 4-lane highway into a 6-lane highway to answer the following question(s).When the government converted the highway from 4 lanes into 6 lanes, they claimed the capacity had increased by 50 percent. When the government switched the highway back from 6 lanes to 4 lanes, they claimed the capacity had been decreased by 33 percent. Had the government used the midpoint method, the percentage increase would have been ________ percent and the percentage decrease would have been ________ percent.
A. 33; 50
B. 33; 33
C. 40; 40
D. 50; 50
Answer: C
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Suppose that business firms spend $500 million on new capital equipment this year. Of this $500 million, $300 million was spent on domestically produced capital and $200 million was spent on foreign-produced capital
All else equal, these transactions contribute ________ to GDP. A) $500 million B) $300 million C) $800 million D) $200 million E) $0
In the two-country model of the Monetary Approach, the spot exchange rate is determined by
A) the relative quantities of money supplied and demanded. B) the real money stock in country A vs. country B. C) the nominal incomes in the two countries. D) the ratio of prices in the economies.
If company Z is receiving a government subsidy, the government is taking money from ____________ and giving it to company Z. If company Z is getting a tax deduction (instead of receiving a subsidy) then company Z is ______________________
A) taxpayers; paying more in taxes than it would without the tax deduction B) taxpayers; subsidizing the taxpayers C) Congress; paying more in taxes than it would without the tax deduction D) taxpayers; paying less in taxes than it would without the tax deduction
The field of economics that analyzes government decision making, politics, and elections is called:
A. public finance. B. public choice theory. C. collective economics. D. political economy.