Taxes are one method of funding the poverty alleviation programs by the government. Which of the following is an important impact of taxes?
a. Taxes increase workers' incentives to work for longer hours.
b. Taxes raise the disposable income of the workers.
c. Imposition of taxes makes the government popular among the people.
d. Taxes reduce the opportunity cost of leisure.
e. Taxes reduce the demand for labor.
d
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Which of the following $1,000 face-value securities has the highest yield to maturity?
A) a 5 percent coupon bond with a price of $600 B) a 5 percent coupon bond with a price of $800 C) a 5 percent coupon bond with a price of $1,000 D) a 5 percent coupon bond with a price of $1,200
In order to reduce risk and increase the safety of financial institutions, commercial banks and other depository institutions are prohibited from
A) owning municipal bonds. B) making real estate loans. C) making personal loans. D) owning common stock.
Consider the salary of Mary Sue Nelson, a sales agent for Plain Truth Advertising. Her compensation package for a week is W = 1,000 + 0.4Q, where Q is her dollar volume of sales. Her productivity is = 200e + µ, where e denotes her hours of effort and µ is a random variable with mean 0. She has an effort cost of C = e2. Under this contract, her choice of effort will be:
A. 0 hours per week. B. 40 hours per week. C. 20 hours per week. D. 80 hours per week.
Under rate-of-return regulation, the price is set so that
A. the firm earns a normal rate of return on investment. B. price equals the marginal cost of production. C. the firm earns a monopoly profit. D. the firm earns a positive economic profit.