Which of the following is a key characteristic of economic freedom?
What will be an ideal response?
a. institutions and policies supportive of voluntary exchange
b. freedom to compete
c. protection of people and their property from aggressors
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If nominal wages are downwardly rigid, a countercyclical policy during a recession leads to ________
A) a fall in consumption B) an increase in tax rates C) an increase in employment D) a fall in investment
Refer to Figure 4-16. Suppose the market is initially in equilibrium at price P1 and now the government imposes a tax on every unit sold. Which of the following statements best describes the impact of the tax? For demand curve D1
A) the producer's share of the tax burden is the same whether the supply curve is S1 or S2. B) the producer bears a greater share of the tax burden if the supply curve is S2. C) the producer bears a greater share of the tax burden if the supply curve is S1. D) the producer bears the entire burden of the tax if the supply curve is S1 and the consumer bears the entire burden of the tax if the supply curve is S2.
In arriving at the quantity of output and price of its product, a company
A. chooses either output or price, and consumer demand determines the other. B. has no control over either quantity or price. C. makes two decisions by setting both optimal output and optimal price. D. generally leaves both quantity and price decisions to consumers.
Which scenario has a higher present discounted value (assume interest is compounded annually); $100 received in 3 years if the interest rate is 8% or $90 received in 2 years if the interest rate is 7.25%?
A. $100 owed in 3 years B. $90 owed in 2 years C. Both scenarios have the same present discounted value. D. It cannot be determined with information provided.