Refer to Figure 16-11. In the graph above, the shift from AD1 to AD2 represents the total change in aggregate demand. If government purchases increased by $50 billion, then the distance from point A to point B ________ $50 billion
A) would be greater than B) would be equal to
C) would be less than D) may be greater than or less than
A
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Vertical equity incorporates the notion that
A. those earning higher incomes should pay more in taxes. B. those earning equal incomes should pay the same in taxes. C. taxes paid should be unassociated with income levels. D. there should be no excess burden created by a tax.
Refer to the information above. What is the value of the exponent for uneducated labor (L)?
A) 0.75 B) 0.40 C) 0.35 D) 0.15
When the housing bubble collapsed, the entire borrowing and lending engine of the economy ground to a halt because:
A. banks wanted to lend to no one, in case they turned out to be a bad risk. B. the herd instinct became to not borrow or lend. C. no one could tell which banks were safe, and which were not. D. All of these statements are true.
A relatively high base income in a cash assistance program:
A. reduces the incentive to work. B. increases the incentive to work. C. does not affect the incentive to work. D. will reduce the incentive to work through the substitution effect but will increase the incentive to work through the income effect.