Suppose the economy is at full employment and firms become more optimistic about the future profitability of new investment. Which of the following will happen in the short run?
A) The aggregate demand curve will shift to the left.
B) Output will decline.
C) Unemployment will decline.
D) Prices will decline.
C
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The unemployment rate is interpreted as the percentage of the
A. able-bodied population who are not working. B. labor force that are not employed. C. workforce that have been laid off. D. adult population who are unemployed.
In order for a Pigovian tax to be effective, it must:
A. be imposed on the consumer. B. be imposed on the producer. C. be imposed on those affected by the externality. D. None of these statements is true.
Consider two people, Sandy Roos, who earns $25,000 . and Gary Behrman, who earns $50,000 . If the government has decided to tax everyone's first $25,000 at 20 percent and everyone's second $25,000 at 40 percent, then Gary pays
a. $10,000 in taxes and Sandy pays $5,000 in taxes b. $10,000 in taxes and Sandy pays $10,000 in taxes c. $15,000 in taxes and Sandy pays $5,000 in taxes d. $15,000 in taxes and Sandy pays $10,000 in taxes e. $17,000 in taxes and Sandy pays $5,000 in taxes
Using productive resources to make capital goods requires that we
A. forgo some level of current consumption. B. get government approval of our plan to make capital goods. C. prove that the existence of the capital goods will not cause any environmental damage. D. get everyone to agree on the best use of those resources.