Lump-sum taxes are equitable but not efficient
a. True
b. False
Indicate whether the statement is true or false
False
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When we try to measure real GDP and the price level, if we underestimate the growth in real GDP, we will
A) always underestimate the rate of inflation. B) sometimes underestimate the rate of inflation. C) always overestimate the rate of inflation. D) sometimes overestimate the rate of inflation.
If nominal wage rates increase by 2 percent per year and the price level increases by 5 percent per year, real wages will:
a. increase by 3 percent per year. b. increase by 5 percent per year. c. increase by 2 percent per year. d. decrease by 5 percent per year. e. decrease by 3 percent per year.
Cassie produces and sells 400 jars of homemade jelly each month for $3 each. Each month, she pays $200 for jars, $150 for ingredients, and uses her own time, with an opportunity cost of $300 . Her economic profits each month are:
a. $550. b. $700. c. $850. d. $900.
The price paid by buyers in a market will decrease if the government
a. increases a binding price floor in that market. b. increases a binding price ceiling in that market. c. decreases a tax on the good sold in that market. d. All of the above are correct.