An increase in AD will trigger more inflation under which of the following conditions?
a. AD is relatively steep.
b. AD is relatively flat.
c. AS is relatively steep.
d. AS is relatively flat.
c
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Goodland is currently operating at full capacity. The country experienced a sudden boom in economic activity. However, the unemployment rate increased soon afterwards. What is likely to have caused such a phenomenon?
What will be an ideal response?
Joe earns $100,000 per year. He pays a tax rate of 28 percent on the first $60,000 of income and a tax rate of 15 percent on income above $60,000. This tax system is an example of a
A) regressive income tax. B) negative income tax. C) progressive income tax. D) proportional income tax.
Steel producers in the United States observe that foreign sales of U.S. steel has drastically declined due to stringent trade policies adopted by the foreign governments and unfair treatment of U.S. steel exports in foreign countries. The lobbying efforts of such loss making U.S. steel manufacturers induce the domestic government to restrict the entry of imported steel and help stimulate the
sales of domestically produced steel. Which of the following tariffs is most similar to the example mentioned above? a. A tariff imposed by the government to stimulate domestic production of a high-technology good with positive spillover effects b. A tariff imposed by the government on the import of cotton textiles because it is an infant industry in the domestic country c. An import tariff applied against a foreign monopoly supplying the domestic market d. Tariffs imposed by the government on an import competing industry that generates a negative production externality e. Reciprocal tariffs introduced by the government of a country as a call for fair trade
Eliminating important details in economic analysis is necessary to understand the complexity of the economy
a. True b. False Indicate whether the statement is true or false