To predict the effects of a tax cut on consumption spending, economists must have some estimate of the
A. income effect.
B. substitution effect.
C. relative price effect.
D. marginal propensity to consume.
Answer: D
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Refer to the scenario above. Suppose the decision to levy a tax on emission of greenhouse gases costs 500 utils in present value and that the discount weight attached to the future benefit is 1/17
In this case, the net benefit earned by the people is: A) -300 utils. B) -441.18 utils. C) 333.65 utils. D) 420 utils.
If a bank has excess reserves of $20,000 and demand deposit liabilities of $80,000, and if the reserve requirement is 20 percent, then the bank has total reserves of
A) $16,000. B) $20,000. C) $26,000. D) $36,000.
The Sherman Act of 1890 and the Clayton Act of 1914 were Antitrust Acts whose purposes included all of the following except
(a) The maintenance of a competitive economy (b) The prevention of monopolies, combinations and other conspiracies in restraint of trade (c) The prevention of price discrimination that reduces competition (d) The prevention of labor union activity that reduces competition in the labor market
The marginal propensity to save is
a. the change in saving divided by the change in income. b. the change in income divided by the change in saving. c. saving divided by income. d. income divided by saving. e. saving divided by consumption.