Refer to the diagram. Which tax system will generate the largest cyclical deficits?
A. T 4 .
B. T 3 .
C. T 2 .
D. T 1 .
D. T 1 .
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Adam Smith noted that people are adept at pursuing their own self-interests, and that ____ harnesses this self-interest remarkably well.
A. a totalitarian regime B. a market system C. a democratic government D. a closed system
To decrease the money supply, the Federal Reserve could
A) conduct an open market sale of Treasury securities. B) lower the discount rate. C) raise income taxes. D) lower the required reserve ratio. E) raise transfer payments.
An expansionary monetary policy may cause asset prices to rise, thereby reducing the likelihood of financial distress and causing consumer durable and housing expenditures to rise. This monetary transmission mechanism is referred to as
A) the household liquidity effect. B) the wealth effect. C) Tobin's q theory. D) the cash flow effect.
Given a linear supply function of the form QXS = 3,000 + 3PX - 2Pr - Pw, find the inverse linear supply function assuming Pr = $1,000 and Pw = $100.
A. QXS = 900 + 3PX. B. PX = 2,900 + 3PX. C. PX = -300 + 0.3333QX. D. PX = 300 + 0.3333QX.