The economy is showing signs of slowing down. Government officials debate how to address the situation, and come up with a variety of proposals. Which proposal would most directly affect aggregate demand?
a. increasing enforcement of laws requiring employees to be paid overtime
b. authorizing the purchase of thousands of vehicles for government use
c. increasing the tax rate on earners in the highest income tax bracket
d. decreasing taxes on profits earned by major businesses and corporations
b. authorizing the purchase of thousands of vehicles for government use
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Ifinstead the NAAQS were legislated to achieve efficiency, find the efficeint abatement level(AE) for sulfur dioxide.
Suppose that the MSB and MSC of abating sulfur dioxide are as follows. Use these functions to answer parts (a) and (b) below. MSB = 32 – 0.2A MSC= 16 + 0.2A
"Other things remaining the same, if the price of a good rises, the quantity supplied of that good increases." This sentence describes a
A) shift of a supply curve. B) shift of the price curve. C) movement along a supply curve. D) movement along the price curve. E) movement along the quantity curve.
A payoff matrix
A) shows the payoffs (i.e. bribes) required to government officials for firms undertaking specific actions. B) details the actions each firm takes. C) shows the payoffs to each firm for each possible outcome. D) is optional in game theory.
With the self-correcting mechanism, if a negative demand shock occurs,
a. a decrease in wage rates will lead to a decrease in the price level so that the economy returns to full employment b. the price level will increase, causing equilibrium GDP to return to its original level c. the wage rate will eventually increase, restoring GDP to its full-employment level d. the price level will remain constant e. there will be no effect in the long run