Smith's income was $50,000 in year 1 and $55,600 in year 2. The CPI was 114 in year 1 and 124 in year 2. What was the approximate percentage change in Smith's real income between the two years?
A) -2.2 percent
B) +3.4 percent
C) -1.7 percent
D) +5.6 percent
E) +2.2 percent
E
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In part, microeconomics is concerned with the study of
A) unemployment and economic growth. B) the Federal Reserve's policies. C) the effect government regulation has on the price of a product. D) national output of goods and services.
Advocates of discretionary policy make which of the following criticisms of the economy’s “self-correcting” mechanism?
A. It is slow. B. It is not very reliable. C. It works only when supplemented by automatic stabilizers. D. All of these responses are correct. E. Options a and b only are correct.
If the government legislates policies that block imports of solar panels and gives domestic manufacturers a $5 billion-dollar tax subsidy, the benefits to the U.S. solar panel manufacturing and distribution industry will be very visible. The bearers of the cost of the tax subsidy _____.
a. are easy to identify b. also fit this pattern of identifiable winners c. will have their interests counterbalanced over time d. are more anonymous
Because of automatic stabilizers, government budget deficits are
a. positive during both expansions and contractions. b. negative during both expansions and contractions. c. zero if averaged out over the entire business cycle. d. larger during expansions and smaller during contractions. e. smaller during expansions and larger during contractions.