Assume you pay a tax of $4000 on a taxable income of $24,000. If your taxable income were $30,000, your tax payment would be $5000. This tax structure is:
A. discriminatory.
B. regressive.
C. proportional.
D. progressive.
Answer: C
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It can take many months or even more than a year to begin a(n) _______________ fiscal policy after a recession has started.
a. contractionary b. exploratory c. aggressive d. expansionary
If the U.S. price level decreases, then
A. the expenditure schedule slope will flatten. B. the expenditure schedule slope will become steeper. C. shift the expenditure schedule upward. D. shift the expenditure schedule downward.
If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output. B. lower price level and lower level of output. C. higher price level and higher level of output. D. lower price level and higher level of output.
When the average cost curve lies above the entrant's residual demand curve, an entrant:
A. lowers the incumbent's average cost curve. B. can profitably enter the market. C. cannot profitably enter the market. D. is indifferent between entering and not entering the market.