Growth compatible institutions:
A. allow people to gain income for themselves by creating impediments for others.
B. encourage people to pursue activities that inhibit growth in others.
C. have incentives built into them that lead people to put forth effort.
D. encourage people to spend a lot of time in leisure pursuits.
Answer: C
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The vertical intercept of the consumption function that represents the portion of consumption expenditure not associated with a level of disposable income is known as:
a. zero income intercept. b. disposable income intercept. c. autonomous consumption. d. automatic consumption line.
A disadvantage associated with an Earned Income Tax Credit (EITC) program to reduce poverty is that it
a. encourages illegitimate births because single women with children receive higher payments. b. rewards laziness because it provides payments to those with low incomes regardless of their work effort. c. does not help the poor who are unemployed. d. creates unemployment by increasing the wage paid to unskilled workers above the equilibrium wage.
Use the following graph, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product, to answer the next question.
With a per-unit tariff in the amount Pt?Pc, price and total quantity sold will be
A. Pc and z. B. Pa and x. C. Pt and x. D. Pt and y.
Which of the following would cause an upward shift in the consumption function?
A. A stock market crash B. An increase in the price level C. A decrease in disposable income D. A decrease in the price level