In 2010 President Obama proposed more generous tax write-offs for businesses that invest in additional equipment in order to stimulate investment spending
a. True
b. False
Indicate whether the statement is true or false
True
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If elasticity of demand is 0.2, elasticity of supply is 0.6, and a 10 percent excise tax is levied on the good:
A. consumers pay 25 percent of the tax. B. consumers pay 20 percent of the tax. C. sellers pay 60 percent of the tax. D. sellers pay 25 percent of the tax.
Which of the following statements is incorrect?
A. Given the economy's MPS, a $15 billion reduction in government spending will reduce the equilibrium GDP by more than would a $15 billion increase in taxes. B. Other things unchanged, a tax reduction of $10 billion will increase the equilibrium GDP by $25 billion when the MPS is .4. C. If the MPC is .8 and GDP has declined by $40 billion, this was caused by a decline in aggregate expenditures of $8 billion. D. A government surplus is anti-inflationary; a government deficit is expansionary.
The De Beers Company, one of the longest-lived monopolies, is facing increasing competition. One source of competition comes from people who might resell their previously owned diamonds. Why is De Beers worried that people might resell their previously
owned diamonds? A) because De Beers will not be able to guarantee the quality of previously owned diamonds and fears that its reputation might be harmed B) because the availability of previously owned diamonds would increase the market demand for diamonds and dilute De Beers' monopoly C) because previously owned diamonds would be a close substitute to newly mined diamonds and would therefore reduce De Beers' market power D) because the availability of previously owned diamonds would make the market demand curve for diamonds more inelastic and force De Beers to lower its price
The term "brain drain" refers to
A) the decreased quality of the college-educated workforce. B) highly educated individuals who leave developing countries for high-income countries. C) the negative impact on brain function of an individual's overinvestment in human capital. D) the diminishing returns to studying for an exam.