Refer to Tax Problem. In the absence of any government intervention (e.g. taxes or price controls), the market equilibrium is
Consider a perfectly competitive market were demand is Q = 100 - P and Supply is Q = P - 10.
a. P = 45, Q = 45
b. P = 55, Q = 45
c. P = 45, Q = 55
d. P = 55, Q = 55
b. P = 55, Q = 45
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As a result of the large surpluses following the Clinton Administration, what did President George W. Bush do in 2001, which reduced the surplus?
A) lowered the interest rate to stimulate spending B) increased government spending C) made substantial cuts in taxes D) raised the interest rate to reduce spending
Consider a two-good production economy in which both goods are produced with fixed proportions production functions. Then, some efficient allocations will exhibit unemployment of some factor providing
a. the firms use the inputs in different proportions. b. the firms exhibit diminishing returns to scale. c. the firms exhibit increasing returns to scale. d. production can never be efficient if there are unemployed inputs.
Given the strict quantity theory of money, if the quantity of money doubled, prices would:
A. fall by half. B. double. C. remain constant. D. increase somewhat but less than double.
A company currently pays a dividend of $4.00 per share. It expects the growth rate of the dividend to be 3% (0.03) annually. If the interest rate is 6% (0.06) what does the dividend- discount model predict the current price of the stock should be?
A. $ 137.33 B. $103.33 C. $66.67 D. it doesn't, you need an expected future selling price to use the model.