A tax cut will have a greater effect on equilibrium real GDP if the
A. average propensity to consume is larger.
B. marginal propensity to save is larger.
C. marginal propensity to save is smaller.
D. marginal propensity to consume is smaller.
Answer: C
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In the circular flow, how are the "value of production," "income," and "expenditures" related?
A) They have no relationship to each other. B) Once tax payments are subtracted at each stage, they are equal. C) Expenditures on GDP equals the value of production which equals income. D) Once net exports of goods and services are subtracted from GDP, all three are equal. E) Value of production always equals income, but expenditures is smaller because households save some of their income and do not spend it.
Discrimination is difficult to measure empirically because
a. it is hard to measure and control for differences in marginal productivity. b. data on racial and gender differences is rarely available. c. discrimination is practiced by very few employers. d. economists find no significant wages differentials due to gender or race.
The median voter theorem states that a. the median voter will never hold the decisive vote in an election. b. policies that are enacted will be least preferable to the median voter. c. the median voter will hold the decisive vote in an election
d. policies that are enacted will be most preferred by the median voter.
Of the 500,000 people (age 16+) in a particular country, 300,000 people are in the labor force. Of these, 240,000 are employed and 60,000 are unemployed. Of the 200,000 workers not in the labor force, 20,000 want jobs but have given up looking for one. What is the unemployment rate if discouraged workers (i.e., the hidden unemployed) are counted as being unemployed?
A. 48% B. 25% C. 10% D. 60% E. 20%