Suppose that 2 per cent of the employed lose their jobs each month (s = 0.02) and 38 per cent of the unemployed find a job each month (f = 0.38). Then, the steady-state rate of unemployment is:
A. 2 percent.
B. 5 per cent.
C. 16 per cent.
D. 36 per cent.
Ans: B. 5 per cent.
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A decrease in the marginal income tax rate is a fiscal policy which will increase aggregate demand
Indicate whether the statement is true or false
Assume that the economy is initially at its equilibrium level of GDP. What will happen to the equilibrium level of GDP if planned investment decreases by 20, government spending increases by 30, and taxes increase by 10?
A) GDP will decrease by 60 B) GDP will decrease by 10 C) there will be no change in GDP D) GDP will increase by 10
Other things being equal, if the demand for a taxed good is relatively elastic, the demand curve is relatively ________ and consumers pay a ________ portion of the tax.
A. steep; large B. steep; small C. flat; large D. flat; small
The price charged by a monopolist is socially inefficient because the price
A) exceeds the true marginal cost of the resources used. B) is less than the opportunity cost of the resources used. C) puts the monopolist into a higher tax bracket. D) is too low.