According to the permanent income hypothesis, taxpayers react to a one-time tax rebate
A. by spending more than the amount of the tax rebate.
B. by saving all of the tax rebate.
C. by spending all of the tax rebate.
D. by saving half of the tax rebate and spending the rest.
Answer: B
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What is not a benefit from the lower costs of transportation that were achieved through advances in railroads, canals and steamboats? a. Free rider problems were reduced. b. Farmers gained larger shares of the selling price of their crops. c. Consumers paid decreasing shares of the purchase price for transportation and marketing costs
d. New unsettled areas were profitably cleared and added to the nation's economic activity.
If you hear an economist argue that the economy does not experience business cycles but merely experiences variations in economic activity over time, you know that economist belongs to the school of
a. real business cycle theory b. Keynesian economics c. production possibilities growth theory d. accelerator cycle theory e. capital-based, long run growth theory
Suppose the price of A increases by 10 percent while the quantity demanded of B does NOT change. We would conclude that
A. the two goods are not related. B. the two goods are complements, but the cross elasticity of demand is not large. C. the two goods are perfect substitutes. D. the two goods are substitutes, but the cross elasticity of demand is not large.
Explain the difference between a cooperative equilibrium and a noncooperative equilibrium in game theory
What will be an ideal response?