Self-interest relates to
A) only monetary objectives.
B) both monetary and nonmonetary objectives.
C) the ceteris paribus assumption.
D) normative economic analysis and not positive economic analysis.
Answer: B
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An example of an income maintenance program is
A) a proportional income tax. B) low-cost college tuition. C) unemployment compensation. D) rent control.
Real money demand in the economy is given by
L = 0.3Y - 600i, where Y is real income and i is the nominal interest rate. In equilibrium, real money demand L equals real money supply M/P. Suppose that Y equals 2000 and the real interest rate is 5%. (a) At what rate of inflation is seignorage maximized? (b) What is the maximum amount of seignorage revenue?
The individual firm operating in a perfectly competitive labor market
A) can hire more labor only by offering a higher wage. B) faces an inelastic demand for labor. C) will pay less to the additional labor employed. D) can buy all the labor it wants at the going market wage rate.
Part of the administrative burden of a tax is
a. the money people pay to the government in taxes. b. reducing the size of the market because of the tax. c. the hassle of filling out tax forms that is imposed on taxpayers who comply with the tax. d. the cost of administering programs that use tax revenue.