During the mid- to late 1990s, the incentives for investment spending resulted in boosts in
A. aggregate demand.
B. personal consumption expenditures.
C. corporate tax revenue.
D. capital gain tax revenue.
Answer: A
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When there are barriers to entry, a profit-maximizing firm already in the industry can charge any price it wants, even in the long run
a. True b. False
Assume that households have positive wealth. Which of the following explains how the income effect of an interest rate increase affects consumption?
A. As the interest rate increases, permanent income increases and future consumption increases. B. As the interest rate increases, expected future income increases and future consumption increases. C. As the interest rate increases, nonlabor income increases and current consumption increases. D. As the interest rate increases, the opportunity cost of current consumption falls, and therefore current consumption increases.
Until the early 1980s, The Walt Disney Company used a pricing strategy in which visitors to its theme parks paid a low admission fee and also paid for rides. This pricing strategy is an example of
A) a two-part tariff. B) perfect price discrimination. C) cost-plus pricing. D) monopoly pricing.
Marginal propensity to save (MPS) is equal to:
a. 1 - MPC. b. MPC - 1. c. MPC + 1. d. 1/MPC