Economies of scale account for what part of a long-run average total cost curve?
A. Downward-sloping
B. Upward-sloping
C. Vertical
D. Horizontal
Answer: A
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If no fiscal policy changes are made, suppose the current aggregate demand curve will increase horizontally by $1,000 billion and cause inflation. If the marginal propensity to consume is 0.75, federal policymakers could follow Keynesian economics and restrain inflation by decreasing:
a. government spending by $250 billion. b. taxes by $100 billion. c. taxes by $1,000 billion. d. government spending by $1,000 billion.
Suppose a state has the following individual income tax structure. The first $20,000 that an individual earns is taxed at 5%. The next $30,000 is taxed at 10%. Any income exceeding $50,000 is taxed at 20%. Based on this tax structure, if a person's income rises from $45,000 to $55,000 . his marginal tax rate is:
a. 25% b. 20% c. 10% d. 15%
A policy that raises taxes or reduces government spending is called:
A. a contractionary monetary policy. B. a contractionary fiscal policy. C. an expansionary monetary policy. D. an expansionary fiscal policy.
Graphically illustrate and explain the effects of an increase in the saving rate on the Solow growth model. In your graph, clearly label all curves and equilibria
What will be an ideal response?