Which of the following will discourage investment?
A) high and variable rates of inflation
B) well-defined property rights
C) a low and steady rate of inflation
D) low tax rates
A) high and variable rates of inflation
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The U.S. income tax is based on the principle of
a. cost of service. b. benefit received. c. ability to pay. d. equality of sacrifice.
Suppose a new EU member begins substituting its imports from non-EU members to other EU members. This is an example of
A) trade diversion. B) trade deflection. C) free trade. D) trade detection.
The IMF offers loans to developing countries in times of balance of payment constraints, but the IMF also faces strong criticisms because:
A. contractionary fiscal policy and expansionary monetary policy tend to be ineffective against balance of payment constraints. B. contractionary fiscal and monetary policies are always undesirable for any developing country. C. it employs economists that know little about developing countries and their economic affairs. D. the conditions tend to be procyclical, therefore worsening the recessions.
A firm faces the following relationship between the real wage it pays and the effort exerted by its workers.
The marginal product of labor for this firm is given by MPN = E (100 - N)/9. The firm will choose to pay a wage such that the effort level is
A. 24. B. 29. C. 27. D. 20.