You have just won a cash award of $500 for academic excellence
A) The substitution effect of this award will be larger than its income effect.
B) The income effect of this award will be larger than its substitution effect.
C) The substitution and income effects will be of identical size.
D) It is impossible to know whether the substitution effect is larger than the income effect or vice versa.
B
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Annual budgeting of production goals of a division within a firm
a. is an accounting mechanism to plan for the costs and revenues over a time period b. increase the burden on the division when goals rise c. can lead to accumulated inventory when goals rise d. all of the above
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and nominal value of the domestic currency falls. b. The real risk-free interest rate falls, and nominal value of the domestic currency falls. c. The real risk-free interest rate rises, and nominal value of the domestic currency remains the same. d. The real risk-free interest rate rises, and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
The notion that "no man produces but with a view to consume or sell,"
A. sums up Say's Law. B. can be restated as "supply creates it own demand". C. was said by David Ricardo, elaborating on Say's Law. D. All of the choices are correct.