During the Reagan administration, the Laffer curve was used to argue that:
A. the supply-side effects of tax cuts are relatively small.
B. discretionary tax cuts are unwise because they create stagflation.
C. lower income tax rates could increase tax revenues.
D. a "flat tax" would simplify the tax code and stimulate economic growth.
Ans: C. lower income tax rates could increase tax revenues.
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Net foreign factor income is ________.
A. the income people in a country receive from resources owned in foreign countries B. the income people in foreign countries receive from resources owned domestically C. the difference between the values of a country's exports and imports D. the difference between the income people in a country receive from resources owned in foreign countries and the income people in foreign countries receive from resources owned domestically
What was particularly significant about the failure of the Bank of New England in 1991?
A) It was the FDIC's first use of the purchase and assumption method. B) It fell under the FDIC's "too big to fail" policy. C) The FDIC had to delay bank liquidation due to lack of funds. D) The FDIC began its policy of insuring checkable deposits fully.
Up until World War II inflation in the U.S. ________
A) remained around zero on average B) rose and remained quite high for an extended period of time C) has gone up and down but has always remained well above zero D) increased by a factor of four every year E) decreased by 30% every year
Without government involvement, wages and interest rates are set by _______________.
A. price floors B. supply and demand C. price ceilings D. None of these choices are correct