Which of the following would encourage greater investment in capital?
a) an increase in the corporate profits tax
b) greater uncertainty regarding the rate of return
c) an increase in the price of capital
d) a reduction in the rate of interest
e) an increase in the rate of depreciation or obsolescence
d) a reduction in the rate of interest
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How do changes in income tax policies affect aggregate demand?
A) Higher taxes increase corporate investment and aggregate demand. B) Higher taxes reduce disposable income, consumption, and aggregate demand. C) Higher taxes increase aggregate supply and thus increase aggregate demand as well. D) Higher taxes increase disposable income, consumption, and aggregate demand.
Which of the following is a characteristic of perfect competition?
A. Large barriers to entry. B. A small number of firms. C. Firms selling unique goods. D. None of the alternatives are characteristics of perfect competition.
When retail bicycle dealers advertise and perform warranty repairs but do not deliver the personal selling message that Schwinn has designed as part of the marketing plan but cannot observe at less than prohibitive cost, the manufacturer has encountered a problem of ____
a. reliance relationships b. uncertainty c. moral hazard d. creative ingenuity e. insurance reliance
The first year of the Bush administration in 2001 could be represented as a(n)
A. increase in the aggregate demand curve. B. decrease in the aggregate demand curve. C. increase in the aggregate supply curve. D. decrease in the aggregate supply curve.