You have $20,000 of current income and $45,000 of future income. The interest rate between the current and future period is 2 percent. What is the maximum amount you could consume in the future?
A. 65,400
B. 20,400
C. 65,000
D. 69,000
Answer: A
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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
The brain drain refers to the effects of Dutch Disease when the infection spreads to other countries
Indicate whether the statement is true or false
Other things the same, an increase in taxes shifts aggregate demand to the left. In the short run this makes output fall which makes the interest rate rise
a. True b. False Indicate whether the statement is true or false
Figure 8.2 shows demand and costs for a monopolistically competitive firm. At the profit-maximizing output level, the firm's profit is:
A. $1,200. B. $1,050. C. $750. D. $375.