Which of the following statements is true regarding expansionary fiscal policy?
A) It leads to an increase in the supply of bonds by the Treasury.
B) It leads to a fall in interest rates.
C) It leads to an increase in net exports.
D) It tends to reduce to size of government.
Answer: A) It leads to an increase in the supply of bonds by the Treasury.
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How is asymmetric information related to asset-price bubbles?
What will be an ideal response?
When demand is perfectly elastic, marginal revenue is
A) zero. B) equal to price. C) declining. D) increasing.
An increase in marginal tax rates will
A) increase the incentive of individuals to earn additional income. B) allow taxpayers to keep more of what they earn. C) reduce the share of additional earnings that individuals are permitted to keep. D) make tax deductible purchases more expensive.
Economics is different from other social sciences because it gives special emphasis to the study of ______; it is similar to other social sciences because they are all concerned with the study of _______.
A) unlimited resources; economic systems B) human interactions; limited resources C) opportunity costs; choices D) social behavior; scarcity