When payroll taxes are raised, the firm's marginal cost curve shifts
A. Upward, and supply increases.
B. Upward, and supply decreases.
C. Downward, and supply increases.
D. Downward, and supply decreases.
Answer: B
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When a Clarke tax is used to finance a public good, each person's tax equals
a. the amount that he is willing to pay for the good. b. the difference between the value he places on the public good and its cost. c. the cost of the public good minus the value that other people claim to receive from it. d. everyone else's tax, with the sum equaling the cost of producing the public good.
Which of the following is necessary for the economy to be in equilibrium?
a. Income must be greater than output. b. Income must be less than output. c. Aggregate expenditure must equal output. d. Aggregate expenditure must equal investment.
If the natural unemployment rate is 4 percent and potential GDP is $30 billion, then according to Okun's Law, when the unemployment rate falls to 3 percent, real GDP
A) decreases to $29.4 billion. B) first decreases by 4 percent and then increases by 4 percent. C) increases to $60 billion. D) increases to $30.6 billion. E) remains constant at $30 billion.
Using the growth accounting equation, if the growth rate of technology is 3%, the growth of labor is 2% and the growth of capital is 1% then if α=0.75 then growth of output can be estimated to be:
A. 4.25%. B. 4.00%. C. 6.00%. D. 4.75%.