Tax cuts tend to boost
A. disposable income.
B. tax revenues.
C. interest rates.
D. inflation.
Answer: A
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Which of the following correctly describes the automatic mechanism through which the economy adjusts to long-run equilibrium?
A) the rightward shift of the aggregate demand curve that occurs during a recession B) the leftward shift of the short-run aggregate supply curve that occurs after a recession C) the rightward shift of the short-run aggregate supply curve that occurs after a recession D) the leftward shift of the aggregate demand curve that occurs after a recession
The incentive structure is a
A) system of rewards and punishments that individuals consider when making decisions. B) system determined by the federal government that gives certain states more federal funds. C) system of infrastructure in the United States that improves commerce. D) system of checks and balances in the government.
Three factories in Stinky City emit high quantities of sulfur dioxide into the local environment. The city government decides to set up a ____________________ that divides the allowable amount of this pollutant between the three companies. The companies can buy and sell these instruments, but the allowable amount of emissions goes down every year.
a. marketable permit program b. pollution charge c. pollution credit d. fine system
Refer to the table below. If supply decreased by 2 units at each price, what would the new equilibrium price and quantity be?
A. $3 and 5 units
B. $4 and 4 units
C. $5 and 5 units
D. $6 and 6 units