Based on the experience of the Great Depression and the New Deal, which one of the following strategies would be most likely to stimulate recovery from a serious economic recession?
a. increase trade restrictions and tariffs to save jobs and enhance tax revenue
b. a reduction in the money supply in order to strengthen the dollar and combat inflation
c. keep taxes low in order to stimulate production and minimize the decline in personal and business income
d. institute frequent policy changes in order to search for and find the policy combination that would be most effective
C
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According to projections by the U.S. Bureau of the Census, how will the population change between 2012 and 2060?
a. The number of Hispanics will rise substantially. b. The number of blacks will decline slightly. c. The number of whites will remain the same. d. The number of Asians will rise substantially.
The fall of actual GDP below the level of potential GDP is a signal that the economy is in a recession
a. True b. False Indicate whether the statement is true or false
Suppose that the government taxes income in the following fashion: 30 percent of the first $20,000 . 50 percent of the next $30,000 . and 60 percent of all income over $50,000 . Ted earns $40,000 . and Robin earns $60,000 . Which of the following statements is correct?
a. Ted's marginal tax rate is 60 percent, and his average tax rate is 50 percent. b. Ted's marginal tax rate is 50 percent, and his average tax rate is 40 percent. c. Robin's marginal tax rate is 50 percent, and her average tax rate is 45 percent. d. Robin's marginal tax rate is 60 percent, and her average tax rate is 40 percent.
Suppose a country has only a sales tax. Now suppose it replaces the sales tax with an income tax that includes a tax on interest income. This would make equilibrium
a. interest rates and the equilibrium quantity of loanable funds rise. b. interest rates rise and the equilibrium quantity of loanable funds fall. c. interest rates fall and the equilibrium quantity of loanable funds rise. d. interest rates and the equilibrium quantity of loanable funds fall.