The impact of instituting investment tax credits is
A) to stimulate private sector investments and increase aggregate demand.
B) to stimulate private production and increase aggregate supply.
C) to encourage individuals to save in an effort to increase funds available for investment.
D) to curtail in excessive lending by financial institutions.
Ans: A) to stimulate private sector investments and increase aggregate demand.
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Mark can make 3 tables and 1 chair in a day while John can make 4 tables and 1 chair in a day. Which of the following is true?
A) Mark has a comparative advantage in making tables. B) Mark has an absolute advantage in making tables. C) John has an absolute advantage in making tables. D) John has a comparative advantage in making chairs.
Tastes for products such as beer differ. As a result
A) consumers of beer have difficulty deciding what type of imported beer to buy. B) the quality of imported beer is less than it could be. C) we see countries specializing completely in the production of beer. D) different countries may each have a comparative advantage in producing different types of beer.
Having interest rate stability
A) allows for less uncertainty about future planning. B) leads to demands to curtail the Fed's power. C) guarantees full employment. D) leads to problems in financial markets.
The reason that patents are granted is
A) to encourage a high rate of consumption. B) to protect new techniques developed through research and development. C) to encourage free trade. D) to increase the labor force.