Convergence theory suggests that gaps in ________ tend to close over time.
A. population levels
B. inflation rates
C. national income
D. unemployment rates
Answer: C
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The earned income tax credit (or EITC):
A. reduces the sales tax paid by low-income workers. B. provides tax credits to firms who hire low-income workers. C. gives low-income workers credits on their federal income taxes. D. reduces the tax rate on investment income.
The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
The above figure shows the demand and supply curves for high-skilled and low-skilled labor. The wage differential between high-skilled and low-skilled labor is
A) $4.00. B) $5.00. C) $6.00. D) $7.00.
A public university knows that demand from potential students is elastic. If the university wants to increase tuition revenue, it should
a. raise its tuition rate b. hold its tuition rate constant and increase faculty salaries c. increase its financial aid d. lower its tuition rate e. increase its enrollment