Which of the following is not an automatic stabilizer?
A. Personal income tax revenue.
B. Corporate income tax revenue.
C. Unemployment compensation benefits.
D. Property tax revenue.
Answer: D
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Which of the duopoly models has the lowest overall combined profit level?
A. The Bertrand model B. The shared monopoly model C. The Cournot model D. The Stackelberg Leader-Follower model
There are ten states in the democratic nation of Katlandia, and each state has ten thousand residents. Although incomes vary, each Katlandian pays a tax equal to the total cost of all government projects divided by the number of residents in the country. Currently, two states each have one army base. An army base adds $2 million to a state's local economy each year. In addition, in terms of increased security, the annual marginal benefit to Katlandia of having an additional army base is shown below. The total cost of an army base is $8 million per year.
If Katlandia builds a third army base, the country will have:
A. fewer than the efficient number of bases. B. the efficient number of bases. C. more bases than they can afford. D. more than the efficient number of bases.
If velocity remains constant, which of the following examples would cause deflation?
a. Money supply increases by 9 percent; real GDP increases by 4 percent. b. Money supply increases by 6 percent; real GDP increases by 8 percent. c. Money supply increases by 3 percent; real GDP increases by 2 percent. d. Money supply increases by 8 percent; real GDP increases by 8 percent.
In the short run, a purely competitive seller will shut down if product price:
A. equals average revenue. B. is greater than MC. C. is less than AVC. D. is less than ATC.