Assuming that the substitution effect is large relative to the income effect, tax reform designed to increase saving
a. increases the interest rate and decreases spending on capital goods.
b. increases the interest rate and increases spending on capital goods.
c. decreases the interest rate and increases spending on capital goods.
d. decreases the interest rate and decreases spending on capital goods.
c
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Deviations from PPP
A) may be due to the differential speed of adjustment between exchange rates and prices. B) may occur when international trade involves lags between order and delivery. C) may appear during periods dominated by news or unexpected events. D) All of the above.
Marginal utility is a measure
a. of total utility derived from consuming a given amount of a good b. of the total utility gained from consuming an extra unit of a good c. computed by dividing total utility by the amount of a good consumed d. determined by production conditions in a market e. of the cost associated with consuming one more unit of a good
Explain why taxes on pollutants reduce pollution while subsidies to firms cutting their pollutants actually increase pollution.
What will be an ideal response?
The decisions of the US and Soviet Union to build nuclear weapons is much like the prisoners' dilemma
a. True b. False Indicate whether the statement is true or false