Why do national income accountants include indirect business taxes in the income approach to GDP computation?
A. Indirect business taxes are the allowances for the portion of capital worn out by producing GDP.
B. Indirect business taxes are part of firms' profits.
C. Indirect taxes are income payments to suppliers of resources.
D. Indirect business taxes are income for the government received through collection by firms.
Answer: D
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In the above figure, the short-run aggregate supply curve is SAS1. If the prices of resources fall, there is
A) an upward movement along SAS1. B) a downward movement along SAS1. C) a shift to SAS0. D) a shift to SAS2.
Most total product curves have
A) first increasing and then decreasing marginal returns to labor. B) output first increasing and then decreasing as labor is added. C) first decreasing and then increasing marginal returns to labor. D) output increasing at an increasing rate as labor is added.
When government runs a budget deficit, it makes up the difference by:
A. issuing government bonds. B. paying down outstanding debt. C. increasing public saving. D. increasing transfer payments.
Which of the following is most likely to be used efficiently?
A. A publicly-owned natural resource B. A private good that entails an external cost C. A private good that entails an external benefit D. A privately-owned natural resource