Assume that a person earns $600 per day at a certain job. If the marginal tax rate is cut from 40% to 30%, then this person's after-tax daily earnings will:
A. Decrease from $240 to $180
B. Increase from $480 to $540
C. Decrease from $540 to $480
D. Increase from $360 to $420
D. Increase from $360 to $420
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Banks will keep excess reserves when
A. they do not foresee profitable opportunities to make loans. B. business conditions generally are depressed. C. they do not foresee opportunities to make secure loans. D. All of these responses are correct.
Which of the following individuals would most likely favor an increase in government spending, as opposed to a tax cut, as the basis for expansionary fiscal policy?
a. "There must be a constant philosophical prejudice against any intervention by the state into our lives, for by definition such intervention abridges liberty."-William Simon b. "The bastards [read politicians] can't spend what they don't have."-Howard Jarvis c. "The family that takes its mauve and cerise, air-conditioned, power-steered, power-braked automobile through cities that are badly paved, made hideous by litter, [and] blighted buildings...to picnic beside a polluted stream amid the stench of refuse may properly reflect on the curious unevenness of their blessings."-J.K. Galbraith d. "Public expenditures are made for the primary benefit of the middle class and financed with taxes on the poor and rich."-Director's Law
In both price-taker and competitive price-searcher markets, when an increase in market demand disrupts a long-run equilibrium, it will lead to
a. higher short-run prices and long-run profits. b. higher short-run prices, short-run profits, and the entry of additional firms into the market. c. higher short-run prices and the exit of firms from the market due to economies of scale. d. no change in prices in the short run, but new firms will enter in the long run.
Althea, a brilliant new Ph.D. in economics, has turned down many job offers because she hopes eventually to teach at one of the top 10 universities in her field. The type of unemployment she is experiencing is:
A. frictional. B. structural. C. underemployment. D. cyclical.