Income on the horizontal axis at which the vertical distance to the 45-degree line is less than the vertical distance to the Ep line gives rise to a ________ amount of unplanned inventory investment, and thus ________ pressure on output
A) positive, upward
B) positive, downward
C) negative, upward
D) negative, downward
C
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Loopholes reduce the efficiency of the tax system.
Answer the following statement true (T) or false (F)
How does an economic model attempt to explain puzzling behavior? What features would be desirable in an economic model?
What will be an ideal response?
Market and socialist economies can be contrasted in all the following ways except that:
A. under a market economy government plays no role in the market; under socialism, government planning boards make most major economic decisions. B. under a market economy labor is allocated by individual choice based on wage levels; under traditional socialism it is allocated by a government planning board. C. under a market economy self-interest is the primary motive of economic activity; under socialism, individuals are supposed to act from considerations of the general good. D. under a market economy the distribution of income is to each according to his ability, effort, and inheritance; under ideal socialism the distribution of income is to each according to his need.
Command-and-control policies are desirable because their tough pollution reduction targets force firms to develop new technologies to survive.
Answer the following statement true (T) or false (F)