Free entry is said to exist in an industry when:
A) all firms entering an industry enjoy economies of scale.
B) entry is unfettered by any special legal or technical barriers.
C) equal amounts of inputs are available to all firms entering an industry.
D) the government subsidizes costs for all new firms entering an industry.
B
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If the spending multiplier equals 6 and equilibrium real GDP is $32 billion below potential real GDP, then total planned expenditures need to decrease by approximately $5.33 billion to close the recessionary gap
a. True b. False Indicate whether the statement is true or false
Suppose the nominal interest rate is 5 percent, the tax rate on interest income is 30 percent, and the after-tax real interest rate is 2.1percent. Then the inflation rate is 2 percent
a. True b. False Indicate whether the statement is true or false
Which of the following is correct?
a. No forms of capital income are taxed twice. b. The tax code cannot be rewritten to provide greater incentive to save. c. Means-tested benefits increase the incentive to save. d. There is a correlation between national savings rates and measures of economic well-being.
Annabelle lives in a wealthy country, while Stacy lives in a poor country. Which statement about their situations is most likely true?
a. Stacy has many siblings, while Annabelle has few or none. b. Stacy’s opportunity costs for raising children are high. c. Annabelle has many siblings, while Stacy has few or none. d. Annabelle’s opportunity costs for raising children are low.