In an article regarding Bangladesh's economy, the author suggests that the government give tax breaks on investment dollars, research and development, and donations to educational institutions. The increase in investment is considered __________ and will generate a larger increase in __________.
a) equilibrium spending; autonomous expenditure
b) autonomous expenditure; induced expenditure
c) induced expenditure; autonomous expenditure
d) autonomous expenditure; multiplier spending
b) autonomous expenditure; induced expenditure
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The progressive income tax is an automatic stabilizer with respect to the Federal government's budget surplus or deficit because
A) individuals must "automatically" pay taxes even when they have a deficit. B) during periods of output growth, a greater percentage of real income "leaks" from the expenditure stream. C) during periods of output growth, the marginal leakage rate increases as taxes decrease. D) None of the above.
Explain the difference between planned and actual investment in the economy. Why is the distinction important?
What will be an ideal response?
Licensing requirements, excessive regulations, unreasonable quality standards, and other actions taken by nations to impede imports are:
A. Import quotas B. Protective tariffs C. Nontariff barriers D. Export subsidies
The economist Irving Fisher, after whom the Fisher effect is named, explained why interest rates ________ as the expected rate of inflation ________, everything else held constant
A) rise; increases B) rise; stabilizes C) fall; stabilizes D) fall; increases