State and local governments
a. use a mix of taxes and fees to generate revenue.
b. are required by federal mandate to levy income taxes.
c. are required to tax property at a standard rate set by the federal government.
d. must tax wages more heavily than interest and dividend income.
a
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In the long-run ISLM model and with everything else held constant, the long-run effect of a cut in government spending is to ________ real output and ________ the interest rate
A) increase; increase B) increase; not change C) not change; increase D) not change; decrease
If the inflation rate is 7 percent, real GDP growth is 2 percent, and the current budget deficit is $100 billion, what must the current national debt be if the debt-GDP ratio is to remain the same?
A) $1,111 billion B) $2,000 billion C) $1,429 billion D) $5,000 billion
If businesses expect the economic activity to expand
A) the planned investment function relating investment to the interest rate will shift to the left. B) the planned investment function relating investment to the interest rate will remain unchanged, but will move downward along the curve. C) the planned investment function relating investment to the interest rate will steepen. D) the planned investment function relating investment to the interest rate will shift to the right.
To maximize sales revenue, an oligopolist will expand output until the elasticity of demand becomes
a. negative. b. zero. c. one. d. infinite.