Which of the following is an example of a positive economic statement?
A) In order to reduce the budget deficit, tax rates should be increased.
B) In order to increase employment, the minimum wage must be decreased.
C) If payroll taxes are raised, then the government budget will show a surplus.
D) If gas prices fall, consumers should purchase more gas.
Answer: C
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If two quick oil change companies agree that one company will purchase locations in rural and suburban areas and the other company will purchase locations in the urban areas, this is an example of ________.
A) bid rigging B) price fixing C) output restrictions D) market division
The relationship between an initial increase in planned investment and the resulting increase in income is known as the
a. capital consumption effect. b. velocity effect. c. multiplier effect. d. domino effect.
Referring to the Production Possibilities Frontiers in Figure 1.11 A and B, which depicts specialized growth?
Figure 1.11
A. Fig. A B. Fig. B C. Either Fig. A or B is correct D. Neither Fig. A nor B are correct
If a person takes $100 from his/her piggy bank at home and puts it in his/her savings account, then M1 will ________ and M2 will ________
A) increase; increase B) not change; increase C) decrease; increase D) decrease; not change E) increase; decrease