In 1998 the Russian government defaulted on its bonds. According to the open-economy macroeconomic model, this should have
a. increased Russian interest rates and net exports.
b. reduced Russian interest rates and net exports.
c. increased Russian interest rates and reduced Russian net exports.
d. reduced Russian interest rates and increased Russian net exports.
a
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Suppose the tax rate on the first $10,000 income is 0 percent; 10 percent on the next $20,000; 20 percent on the next $20,000; 30 percent on the next $30,000; and 40 percent on any income over $80,000. Family A has income of $40,000 What is the marginal and average tax rate for Family A?
A) marginal—10 percent; average—10 percent B) marginal—20 percent; average—10 percent C) marginal—25 percent; average—20 percent D) marginal—20 percent; average—25 percent
Identify the “oversimplified multiplier formula.”
A. Multiplier = 1 divided by (1 ? change in GDP) B. Multiplier = 1 divided by (1 ? marginal propensity to consume) C. Multiplier = 1 divided by (1 ? marginal propensity to save) D. Multiplier = 1 divided by (1 ? rate of inflation)
In the IO perspective it is important to enter an industry with
a. High supplier power b. Low threat from substitutes c. Low levels of rivalry between firms d. Only B & C
Government failure may occur die to:
a. short run focus of elected officials b. special-interest group influence c. difficulty is measuring the marginal social benefit and the marginal social cost of government spending d. all of the above