Automatic stabilizers are so-named because
A. the policy suggestions of the Council of Economic Advisors are automatically followed.
B. they occur automatically when real GDP changes.
C. the policy suggestions of the Office of Management and Budget are automatically followed.
D. they are automatically undertaken by the Federal Reserve Bank to reduce budget deficits.
Answer: B
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Rank these three items in terms of the elasticity of the demand for them at any given price, from most elastic to least elastic: hot beverages, coffee and Peet's Coffee
A) hot beverages, coffee, Peet's Coffee B) coffee, Peet's Coffee, hot beverages C) Peet's Coffee, coffee, hot beverages D) coffee, hot beverages, Peet's Coffee
What determines the proportion of a unit excise tax that will be passed on to consumers in the form of higher prices?
A) the nature of the projects funded by the tax B) the number of additional taxes that consumers have to pay C) the popularity of the tax D) the degree to which quantity demanded and supplied of the good respond to price changes
Which of the following would indicate that an income tax is progressive?
a. high-income people pay $3,000 . low-income people pay $1,000 b. low-income people pay $3,000 . high-income people pay $1,000 c. high-income and low-income people all pay $1000 each d. high-income people pay 20 percent of their income in taxes; low-income people pay 10 percent e. both high-income and low-income people pay 10 percent of their income in taxes
All of the following are assumptions of the classical model EXCEPT
A. pure competition. B. self-interest of economic actors. C. inflexible wages. D. absence of money illusion.