Because the poor tend to use public transportation more than the rich do, a tax on the Washington, D.C., metro probably would be:
A. retroactive.
B. reactionary.
C. progressive.
D. regressive.
Answer: D
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Which of the following would lead to a depreciating dollar?
A. A higher federal deficit B. Lower interest rates C. Higher interest rates D. Contractionary monetary policy
People increase their labor supply in response to a temporary increase in government purchases because
A) current or future taxes will increase, making them financially worse off. B) they need to work more to keep up with their neighbors. C) interest rates will rise, causing a substitution effect. D) higher spending today will lead to higher spending in the future, as well.
Suppose that the demand for oranges increases. Explain the long-run effects of the guiding function of price in this scenario
What will be an ideal response?
An Australian investor buys a U.S. Treasury bond that has a price of $10,000 . pays 5 percent interest, and matures in a year. Between the purchase date and the maturity date, the exchange rate changes from $1 = AUD 5.0 to $1= AUD 5.2 . What will be the Australian investor's rate of return from the U.S. bond?
a. 4 percent b. 7 percent c. 9.2 percent d. 12 percent e. 25 percent