The establishment of an income tax, ceteris paribus, will result in
A) a lower expenditure multiplier.
B) a higher expenditure multiplier.
C) no change in the size of the multiplier.
D) None of the above.
A
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When real interest rates in other countries rise relative to those the United States, all else held constant, we would expect the U.S. dollar to ________.
A. inflate B. depreciate C. appreciate D. deflate
Marty's Bird House suffers a short-run loss. Marty can reduce his loss below the amount of his total fixed costs by continuing to produce if his revenue
A) exceeds his implicit costs. B) exceeds his nonmonetary opportunity costs. C) exceeds his marginal costs. D) exceeds his variable costs.
Unlike colonial America, there are no government restrictions on business activities and practices today
Indicate whether the statement is true or false
In the short run, an increase in the price level induces firms to expand production because
A. higher prices allow firms to hire more inputs by offering higher prices for inputs, which increases productivity and profits. B. prices of inputs are held constant, so the higher prices for firms' products imply that it is profitable to expand production. C. each firm must keep its production level up to the level of its rivals, and some firms will expand production as the price level increases. D. they can increase profits by increasing maintenance costs.