A reduction in the marginal propensity to import will cause
A) the ZZ line to become flatter and a given change in government spending (G) to have a larger effect on domestic output.
B) the ZZ line to become flatter and a given change in government spending (G) to have a smaller effect on domestic output.
C) the ZZ line to become steeper and a given change in government spending (G) to have a larger effect on domestic output.
D) the ZZ line to become steeper and a given change in government spending (G) to have a smaller effect on domestic output.
C
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Suppose the cost curves in the above figure apply to all firms in the market. If the initial price is P1, firms are ________ and some firms will ________ the industry
A) making an economic profit; leave B) making an economic profit; enter C) incurring an economic loss; leave D) incurring an economic loss; enter
When the Fed makes open-market purchases bank
a. withdrawals and lending increase. b. withdrawals increase and lending decreases. c. deposits and lending increase. d. deposits increase and lending decreases.
The free-rider problem arises because:
A. once provided, a public good is available to all regardless of whether they paid for it. B. poor people cannot afford to contribute to public goods. C. enforcement of tax laws is inadequate. D. people disagree with how the government spends its money.
As a result of an increase in the Medicare tax that employers must pay on their employees? wages, employers reduce the starting wage for new employees. This is an example of
A. tax shifting. B. a regressive tax. C. tax avoidance. D. tax incidence.