A nation can produce two products: tanks and autos. The table below is the nation's production possibilities:
Refer to the above table. The total opportunity cost of three units of tanks is:
A. 6 units of tanks
B. 350 units of autos
C. 650 units of autos
D. 1000 units of autos
Answer: B
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Lowering the interest rate will
A) increase investment projects by firms. B) decrease the value of the dollar and lower net exports. C) decrease spending on consumer durables. D) decrease spending on new homes.
If you were told the MPC was = 0.75 and the government engaged in a tax decrease of $400B, then the overall change in GDP would be:
A. $400B. B. $1600B. C. $300B. D. $1200B
Which of the following is an example of a bank functioning as a financial intermediary?
a. Bank A, which has a vault facility where its clients can keep their valuable documents b. Bank B, which has an excellent reputation for stability and sound investment c. Bank C, which pays its employees better than average salaries d. Bank D, which provides many small businesses with start-up capital
Which of the following statements correctly describes the relationship between the size of the deadweight loss and the amount of tax revenue as the size of a tax increases from a small tax to a medium tax and finally to a large tax?
a. Both the size of the deadweight loss and tax revenue increase. b. The size of the deadweight loss increases, but the tax revenue decreases. c. The size of the deadweight loss increases, but the tax revenue first increases, then decreases. d. Both the size of the deadweight loss and tax revenue decrease.