An example of the "equity vs. simplicity" tradeoff is the tax treatment of
A. capital gains.
B. spouses.
C. earned income.
D. children.
Answer: A
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Based on Table 3.1, trade between the United States and Mexico will occur as long as the relative price of shoes is between
A) three computers and one computer. B) three computers and two computers. C) one-half computer and one-third computer. D) six computers and three computers. E) None of the above.
Using the one-period valuation model, assuming a year-end dividend of $1.00, an expected sales price of $100, and a required rate of return of 5%, the current price of the stock would be
A) $110.00. B) $101.00. C) $100.00. D) $96.19.
Alan puts $20,000 in an uninsured savings account at the Boston National Bank. Susie borrows $20,000 from the Boston National Bank, flies to a Central African country, and is never heard from again. Which of the following is true in this case? a. Alan will lose her $20,000
b. Alan will lose her $20,000 if she and Norma are related. c. Alan will lose her $20,000 if the First National Bank makes all of its loans to people who run off to South Pacific islands. d. Alan will not lose her $20,000 no matter what happens to the First National Bank. e. Alan will not lose her $20,000 unless the Fed fails
Suppose the equilibrium price for pizza is $5 . If the government sets price at $4, the result would be
a. a shortage because at $4, the quantity demanded would exceed the quantity supplied b. a surplus because at $4, the quantity demanded would be less than the quantity supplied c. that the market would remain in equilibrium, but with a larger quantity bought and sold at $5 d. that at $4, the quantity sold would be greater than the quantity bought e. that at the equilibrium price of $5, fewer units would be sold