When economic profits are zero, accounting profits are most likely:
A. positive.
B. negative.
C. zero.
D. All of these are likely.
A. positive.
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A tax multiplier equal to ?4.30 would imply that a $100 tax increase would lead to a:
a. $430 decline in real GDP. b. $430 increase in real GDP. c. 4.3 percent increase in real GDP. d. 4.3 percent decrease in real GDP. e. 43 percent decrease in real GDP.
The substantial increase in household debt relative to income since the mid 1980s meant that in 2008 many households
a. had little savings or other reserve assets for use to deal with unexpected expenditures. b. could safely afford to purchase larger homes because housing is always a good investment. c. could spend everything they earned because their interest obligations on outstanding credit were low. d. would be able to easily adjust their current spending if their monthly payments on adjustable rate mortgages rose.
A Pigouvian subsidy
A. cannot exist with externalities. B. is the same thing as a Pigouvian tax. C. is measured in terms of Pigouvian dollars. D. moves production to the socially optimal level of output.
If everyone earned the same income, the Lorenz curve would be
A) a rectangular hyperbola. B) a straight line from the origin at a 45-degree angle. C) the horizontal axis. D) very bowed from the diagonal.