The rational-ignorance effect refers to the
a. lack of incentive voters have to become well-informed about candidates and issues because their vote is unlikely to affect the outcome of an election.
b. fact that most people choose to become just as well-informed when making choices as consumers as they do when making choices as voters.
c. lack of rational analysis on the part of voters when they choose not to become informed about candidates and issues even though this knowledge would produce great personal benefit to them.
d. problem of not enough information being supplied to voters because politicians are not spending enough on campaign adds to inform voters of their positions on issues.
A
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Suppose you paid $500,000 for an asset. You hold the asset for five years. The interest rate that you get for the asset is 10%. Assume the tax rate on capital gains is 20%.
(A) If capital gains are taxed only when the asset is realized, how much will you have earned on the asset? (B) Suppose that capital gains are taxed annually instead of at realization. How much will you have earned on the asset? (C) How big is the difference in the two taxing schemes?
When a monopolist sells two units of output its total revenues are $100. When the monopolist sells three units of output its total revenues are $120. When the monopolist sells three units of output, the price per unit is:
A. $6.67. B. $20. C. $33.33. D. $40.
For each of the following changes, what happens to the real interest rate and output in the very short run, before the price level has adjusted to restore general equilibrium?(a)Wealth declines.(b)Money supply declines.(c)The future marginal productivity of capital declines.(d)Expected inflation rises.(e)Future income rises.
What will be an ideal response?
The largest component of M1 is:
A. saving and money market accounts. B. checking accounts. C. reserves. D. currency.