If we consider the equation PAE = A + bY the independent part of the equation that depends on income is:
A. b
B. Y
C. A
D. PAE
A. b
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If airfares to Europe were to increase, other things equal, an economist would predict that: a. most people will not change their travel and vacation plans
b. more individuals will choose to fly to Europe because now it is a more valuable experience. c. some individuals will substitute toward other travel destinations. d. airlines will make significantly greater profits.
If a tax is proportional, the average tax rate
a. remains the same as income rises. b. rises as income rises. c. falls as income rises. d. falls as income falls.
Refer to Exhibit 6-2. The labor force participation rate in year 3 is
a. 12 1/2 percent. b. 70 percent. c. 80 percent. d. 30 percent. e. 50 percent.
Based on the table, the multiplier in this case is ______.
a. 2/3
b. 3
c. 10 billion
d. 30 billion