One result of a tax is an increase in economic efficiency
Indicate whether the statement is true or false
FALSE
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Suppose real GDP is $12.1 trillion and potential GDP is $12.6 trillion. To move the economy back to potential GDP, Congress should
A) lower taxes by an amount less than $500 billion. B) lower taxes by $500 billion. C) raise government purchases by more than $500 billion. D) lower government purchases by $500 billion. E) raise government purchases by $500 billion.
Including investment and production in the two-good, two-period model with trade
A) allows the country to equalize absorption and output demand. B) renders terms of trade endogenous. C) allows the country to react to changes in the interest rate. D) allows the government to run budget deficits.
Why do both households and societies face many decisions?
a) because resources are scarce b) because populations may increase or decrease over time c) because wages for households and therefore society fluctuate with business cycles d) because people, by nature, tend to disagree
Payment of a share of prospective royalties to the author before publication is called the
A. allowance. B. bonus. C. advance. D. stipend.