Consider a tax cut which affects not only consumer disposable income, but also after-tax earnings from labor supplied to labor markets and from financial assets acquired through saving. In the long run we would expect this tax cut to
A) increase both the price level and the level of real GDP.
B) decrease both the price level and increase real GDP.
C) increase the price level.
D) increase the level of real GDP.
D
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Which of the following statements is true?
A) Defending an overvalued currency is easier than defending an undervalued currency. B) Defending an undervalued currency is easier in the short run than in the long run. C) The nominal exchange rate is the ratio of the same basket of goods in two countries. D) The real exchange rate is calculated by dividing the nominal exchange rate by the inflation rate.
If Ebenezer Scrooge spends rather than saves his vast wealth, he will
A) promote economic growth because he is increasing the amount of funds available for investment. B) slow economic growth because he is reducing the amount of funds available for investment. C) slow economic growth because he is increasing the amount of funds available for investment. D) promote economic growth because he is decreasing the amount of funds available for investment.
If demand increases and supply decreases, but supply decreases more than demand increases,
a. equilibrium price will fall. b. equilibrium quantity will fall. c. quantity sold will increase. d. the quantities of both demand and supply will increase.
In the petroleum industry, proved reserves are
a. evidence that uncertainty is not a problem in the industry. b. inevitably growing smaller over time. c. the same thing as the current supply of petroleum. d. resources recoverable at current prices and technology.