Pat can either drive to work, which takes half an hour and uses $1.50 worth of gas, or take the bus, which takes an hour and costs $1.00. How should Pat get to work?
A. Pat should drive if saving half an hour is worth $0.50 or more.
B. Pat should drive because it saves half an hour relative to taking the bus.
C. Pat should take the bus if saving half an hour is worth $0.50 or more.
D. Pat should take the bus because it costs $0.50 less than driving.
Answer: A
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Refer to Figure 4.1. A shift from S2 to S1 will result from which of the following?
A) an increase in expected future profits B) an increase in net exports C) a decrease in corporate taxes D) an increase in tax credits for savings
In Watermala, the marginal propensity to consume is 0.6, base consumption is $1,000 . the tax rate is 30 percent of income, national income is $5,000 . investment spending is $800, government spending is $1,500, export earning is $1,000 . and import spending is $500 . Given this information, Watermala's aggregate expenditure equals _____
a. $5,900 b. $7,800 c. $3,900 d. $10,300
Which of the following is an appropriate fiscal policy prescription for the government to follow?
A. Deficit reduction during a recession. B. Deficit reduction during a war. C. Deficit reduction when there is excess AD. D. Deficit expansion in an inflationary gap.
The ability-to-pay principle claims that a person should pay taxes according to
a. the level of public education that the person has received throughout his lifetime. b. how many government services that person will receive. c. how well that person can shoulder the tax burden. d. the level of debt that the person has.