If a nation lacks abundant natural resources, it ______.
a. still faces the same challenges as a nation with abundant natural resources
b. cannot achieve sustained economic growth
c. will likely have a difficult time during its initial development
d. must increase the size of its population to achieve economic growth
c. will likely have a difficult time during its initial development
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In the figure above, if the MPC increased, the aggregate expenditure lines would ________ and the multiplier would ________ in value
A) not change; rise B) become steeper; fall C) not change; fall D) become steeper; rise E) become less steep; rise
Which of the following is true of a proportional tax rate? a. It is a tax rate that remains constant as the tax base changes
b. It is a tax rate that decreases as the tax base increases. c. It is a tax rate that increases as the tax base increases. d. It is a tax rate that increases as the tax base increases and then decreases as the tax base decreases.
If regulators required firms in monopolistically competitive markets to set price equal to marginal cost,
a. firms would respond by lowering their costs. b. firms would require a subsidy to stay in business c. new firms that enter the market would operate at efficient scale. d. the most efficient firms would not be affected.
A person states that "a large public debt will bankrupt the U.S. government." An economist is likely to respond:
A. yes because this public debt will reduce our ability to borrow the necessary funds from foreign nations. B. yes because a large public debt means that the U.S. government will not be able to meet its financial obligations. C. no because the government can refinance the public debt by selling new bonds. D. no because most of the public debt is held by foreign nations.