Answer the following statement(s) true (T) or false (F)
1. If the mpc is 0.8 and government spending increases by $10 billion, equilibrium Y will increase by $50 billion.
2. Decreasing taxes is an example of expansionary fiscal policy.
3. Most of the U.S. government debt is owed to foreign countries.
4. The HDI is an index of well-being.
5. The deficit is the sum of yearly government debts since 1776.
1. True
2. True
3. False
4. True
5. False
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Which of the following is true of opportunism?
a. Opportunism increases the possibility that a party can gain by disregarding the contract. b. Opportunism lowers the cost of negotiation between parties when the contract is incomplete or unclear. c. Opportunism allows parties to maximize the value of their transactions. d. Opportunism leads to mutually beneficial outcomes.
Exhibit 8-1 Disposable income and consumption data Disposable Income(Y) Consumption(C) 0 500 1,000 1,400 2,000 2,200 3,000 2,900 4,000 3,500 5,000 4,000 In Exhibit 8-1, when disposable income (Y) is increased from $1,000 to $2,000, the marginal propensity to consume is:
A. 0.2. B. 0.6. C. 0.8. D. 1.0.
Inflation redistributes income from people who do not raise their prices to people who do raise their prices.
Answer the following statement true (T) or false (F)
Torrie is thinking of starting up a small business selling hand-painted wine glasses. She is considering setting up her business as a sole proprietorship. What is one advantage to Torrie of setting up her business as a sole proprietorship?
A) As a sole proprietor, Torrie would face limited liability. B) As a sole proprietor, Torrie would have the ability to share risk with shareholders. C) As a sole proprietor, Torrie would have both ownership and control over the business. D) All of the above would be advantages of setting up her business as a sole proprietorship.