Assume that the lost output due to tax distortions is proportional to the square of the tax rate
If the average cost of the distortion created by taxes is currently $1000, and the tax rate is increased from 40% to 50%, the average cost of the distortion created by taxes will increase to A) $383.33.
B) $450.00.
C) $640.
D) $1562.50.
D
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The MP curve may be used to represent how ________
A) movements of the inflation rate are determined by the real interest rate B) monetary policy responds to changes in the real interest rate C) movements of the real interest rate are related to the inflation rate D) all of the above E) none of the above
When economy-wide business fluctuations are negative, they are referred to as
A) contractions/recessions. B) booms. C) expansions. D) peaks.
A zero percent unemployment rate
A) is the only efficient unemployment rate. B) is one of the economic goals of the Canadian government. C) is not consistent with the notion of full employment. D) was last achieved during World War II when everyone was willing to work at the going wage rate to end the war. E) would alleviate scarcity
Import substitution is a program promoting local production of products that would otherwise be imported.
a. true b. false