If Ming is willing to pay $75 to attend the Broadway production of The Lion King but actually pays $40, she receives a consumer surplus of $35
a. True
b. False
Indicate whether the statement is true or false
True
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The supporters of a proposal to increase marginal taxes on those earning over $200,000 a year say this change would generate $100 billion in new tax revenues. A supply-side economist would argue that the actual revenue raised will be
A) exactly $100 billion because there are no offsetting factors to a tax increase. B) more than $100 billion, because lower income people will work harder when they perceive the tax system to be fairer. C) more than $100 billion because interest rates will also be affected. D) less than $100 billion because some people will respond by working less.
Suppose that the economy is in long-run equilibrium and the government decided to engage in expected expansionary policy by increasing the money supply
If we assume rational expectations, which of the following statements is correct about the effect of expansionary policy in the long run? A) The unemployment rate will remain unchanged, real GDP will remain unchanged and the price level will decrease. B) The unemployment rate will increase, real GDP will increase and the price level will increase. C) The unemployment rate will remain unchanged, real GDP will remain unchanged and the price level will increase. D) The unemployment rate will decrease, real GDP will decrease and the price level will decrease.
If wealth ________, then saving increases, which is shown by a ________
A) decreases; rightward shift of the supply of loanable funds curve B) decreases; movement downward along the supply of loanable funds curve C) increases; rightward shift of the supply of loanable funds curve D) increases; leftward shift of the supply of loanable funds curve E) increases; movement upward along the supply of loanable funds curve
With tied aid
(a) MNC investment depends on tax concessions. (b) aid recipients must use the aid to purchase goods and services from the donor. (c) aid recipients must follow World Bank/IMF conditionality. (d) all of the above.