In an attempt to raise sales, Hannah cut prices in her bookstore by 20 percent. If the dollar value of her sales remained constant, that indicates
A. old customers bought no more books.
B. no new customers bought books.
C. the quantity of books sold increased 20 percent.
D. the demand curve is vertical.
Answer: C
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Monetary policy designed to offset an inflationary gap would:
a. Increase interest rates and increase aggregate demand. b. Increase interest rates and decrease aggregate demand. c. Decrease interest rates and increase aggregate demand d. Decrease interest rates and decrease aggregate demand.
Consider an individual who earns $95,000, has two children, pays $6,000 in child care expenses for one child, pays $19,000 in college tuition for the other child, pays $6,500 in mortgage interest (mortgage interest is tax deductible), and pays $9,600 in medical expenses. Medical expenses in excess of 7.5 percent of one's income are deductible. Personal exemptions are $3,050 per person (including the tax filer). When the individual's income is $30,000 or above, he/she gets a 12% child care credit. A college credit of 9% of tuition costs is given to those that have income less than $90,000. Her statutory marginal tax rate is 15 percent. What is her actual or effective marginal tax rate?
What will be an ideal response?
Why is a stable monetary system essential for the smooth operation of a market system? What would an unstable monetary system be like? Why isn't a barter economy just as efficient as an economy with money?
If GNP is $600 billion, receipts of factor income from the rest of the world are $50 billion, and payments of factor income to the rest of the world are $30 billion, then GDP is
A. $520 billion. B. $580 billion. C. $620 billion. D. $680 billion.