An increase in income taxes ________ employment and ________ potential GDP
A) increases; increases
B) increases; does not change
C) decreases; decreases
D) does not change; does not change
E) increases; decreases
C
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In the circular flow model, the factors of production flow in the
A) opposite direction as does the goods market. B) opposite direction as does the government. C) same direction as do the rents, wages, interest, and profits. D) opposite direction as do the rents, wages, interest, and profits. E) same direction as does the goods market.
When considering the factor distribution of income, into whose income would corporate profits be included?
A. Owners of physical capital B. Owners of human capital C. Proprietors D. Workers.
All large firms have monopoly power.
Answer the following statement true (T) or false (F)
If a production process creates positive externalities, a competitive market produces too few positive externalities because the producer
A) does not pay all the costs of the externalities. B) does not receive compensation for the externalities. C) Both A and B. D) None of the above.