An increase in Social Security payments to retired persons has what effect on equilibrium income?
A. GDP will fall.
B. GDP will rise.
C. GDP will remain the same.
D. GDP will fall by less than the increase in payments.
Answer: B
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Answer the next question using the following budget information for a hypothetical economy. All data are in billions of dollars. Also assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$800$825$4,000Year 28508504,200Year 39008754,350Year 49509004,500Year 51,0009254,600Assume that year 1 is the first year for this economy and year 5 is the current year. What is the public debt in this economy at year 5?
A. $75 billion B. $25 billion C. $925 billion D. $125 billion
An aggregate supply curve that is either horizontal or upward sloping, depending on whether the absolute price level increases as firms produce more output is called:
A) short-run aggregate supply curve. B) long-run aggregate supply curve. C) potential GDP. D) NAIRU.
A progressive tax system
A. Provides more work incentives than a system with constant marginal tax rates. B. Promotes more investment than a system with constant marginal tax rates. C. Means higher marginal tax rates at higher income levels. D. Means lower marginal tax rates at higher income levels.
When a firm practices price discrimination, for each separate set of consumers it will determine the rate of output at which
A) MR > MC. B) MR = P. C) MR = AVC. D) MR = MC.