In a progressive tax system, ________
A) the average tax rate equals the marginal tax rate
B) the marginal tax rate exceeds the average tax rate
C) the average tax rate exceeds the marginal tax rate
D) the average tax rate is equal for all taxpayers
B
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Paul Romer's theory on the importance of knowledge differs from traditional theory in that Romer
A) argues, that investment is not important in promoting growth, but that the acquisition of knowledge is the sole determinant of economic growth. B) argues that an investment-knowledge cycle allows a once-and-for-all increase in investment to permanently raise a country's growth rate, while traditional theory argues that a once-and-for-all increase in investment leads to a higher standard of living but not to a higher growth rate. C) argues, that an investment-knowledge cycle exists which requires that investment rates keep increasing or else growth rates will fall, while traditional theory argues that growth rates will not fall, although they will not increase either. D) emphasizes investment rates while traditional theory emphasizes the importance of knowledge as a factor of production.
To offset the effect of households and firms deciding to hold more of their money in checking account deposits and less in currency, the Federal Reserve could
A) raise government spending. B) sell Treasury securities. C) raise bank taxes. D) lower the required reserve ratio.
Gonzo consumes only two things--coke and hot dogs. We can define the addition to "happiness" of consuming an additional coke as the marginal utility of coke and that for hot dogs as the marginal utility of hot dogs. The prices of coke and hot dogs are fixed and Gonzo has a limited budget. To maximize "happiness" subject to his limited budget, Gonzo should purchase coke and hot dogs so that
A. the addition to happiness of the last coke is the same as the addition to happiness of the last hot dog. B. the marginal utility of coke is the same as the marginal utility of hot dogs. C. he spends the same amount on coke as on hot dogs. D. the addition to happiness per dollar spent on coke is the same as the addition to happiness per dollar spent on hot dogs.
Analysis that is limited to making either purely descriptive statements or scientific predictions is
A. macroeconomics. B. normative economics. C. positive economics. D. microeconomics.