Regardless of their stance on Keynesian stimulus measures, most economic experts agree that the U.S. government could increase average incomes by:
A. dramatically increasing the real value of the federal minimum wage.
B. spending more on roads, railways, bridges, and airports.
C. building more prisons.
D. raising taxes for households in the bottom 20 percent of the income distribution.
Answer: B
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In a perfectly competitive market, an increase in market demand
A) raises the price in the short run and attracts new firms in the long run. B) raises the price in the short run and the long run. C) lowers the price in the short run and in the long run. D) has no effect on the price in either the short run or the long run because the firms are price takers.
Private disposable income is equal to
A) Y + TR + INT - T. B) Y + NFP + TR + INT - T. C) Y - TR - INT + T. D) Y + CA - G.
With marginal cost pricing
A) marginal benefits are usually less than marginal cost. B) all opportunity costs will be covered in the short run. C) the price charged is equal to the opportunity cost to society of producing one more unit of the good. D) there cannot be any short-run economic profit.
State and local governments generate most of their revenues through
A. Inventory and excise taxes. B. Corporate profit taxes. C. Sales and property taxes. D. Income taxes.