An expected tax increase will tend to cause
A) an increase in stock prices.
B) a reduction in stock prices.
C) no change in stock prices.
D) an ambiguous effect on stock prices.
C
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Keynesian policies are ineffective at combating stagflation because stagflation is caused by: a. budget surpluses
b. decreases in aggregate supply. c. trade deficits. d. decreases in aggregate demand. e. budget deficits.
Define the term adverse selection. Why is an insurance company unable to offer fair odds when it faces an adverse selection problem? How might the insurance company deal with an adverse selection problem?
What will be an ideal response?
When the wage rate rises, a worker is better off and thus chooses to have more leisure and more consumption. This phenomenon is known as
a. compensating differential. b. the income effect. c. the substitution effect. d. intertemporal substitution.
The multiplier is calculated as the
What will be an ideal response?