Answer the following questions true (T) or false (F)
1. RJR Nabisco has three alternatives for manufacturing snack foods:
• Option 1: Manufacture cookies alone and obtain a profit of $30 million.
• Option 2: Manufacture chips alone and obtain a profit of $25 million.
• Option 3: Manufacture both cookies and chips and obtain a profit of $35 million.
Given the information above, the opportunity cost of this firm is $30 million.
2. The number of U.S. farms is on the order of 4 million at present.
3. The value of any index for the reference or base year is always 1.
1. TRUE
2. FALSE
3. TRUE
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In the Monetarist model,
a. monetary policy and not fiscal policy is the prime factor in aggregate demand movements. b. money demand is more volatile than in the Keynesian model. c. expectations are correct on average. d. aggregate supply is not the primary source of business cycles. e. both a and b.
What is meant by the term double taxation? a. The tax on corporations is double the rate paid by other forms of business. b. The tax on corporations is one-half the rate paid by other forms of business. c. Corporations must pay both federal and state taxes. d. Corporate profits are taxed, and that portion of profits distributed as dividends is taxed as personal income
e. The corporation pays taxes on stocks and bonds.
Savings deposits are included in
A. M1 but not M2. B. M2 but not M1. C. M1 and M2. D. None of the above is correct.
The slope of the consumption function equals the marginal propensity to consume.
a. true b. false