Tax revenues increase in direct proportion to increases in the size of the tax
a. True
b. False
Indicate whether the statement is true or false
False
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A country's total output, or real GDP, is determined only by its aggregate production function
a. True b. False
What are options for monetary easing using interest rate policy instruments when the rate has hit the zero lower bound?
a. At that point, interest rate policy cannot be used. b. Monetary easing can still occur whenever interest rates are greater than zero at the retail level. c. The central bank can increase the money supply, and interest rates can be less than zero. d. Borrowing can be stimulated in ways other than lower rates of interest.
The trade model described in the text demonstrates that countries can expand consumption by specializing in the production of goods and services in which they have a comparative advantage. In reality we do not see complete specialization in production
State three reasons why this is case. What will be an ideal response?
U.S. households wishing to purchase shares of stock in a European company are ________ the foreign exchange market.
A. suppliers of U.S. dollars in B. suppliers of Euros in C. demanders of U.S. dollars in D. supplied Euros by the Fed for use in