Suppose all of the major computer manufacturers announced that beginning next month there would be major price reductions on their computers. This would cause the current demand for computers to:
A. increase.
B. decrease.
C. remain unchanged.
D. increase and then decrease.
Answer: B
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Which of the following is not a feature of an efficient tax?
a. An efficient tax should minimize the excess burden of taxation. b. An efficient tax should have low compliance costs. c. An efficient tax should be equitable. d. An efficient tax should be easy to monitor and administer.
The shape of the production possibilities curve in the above figure indicates that
A. production of both corn and cloth is characterized by constant costs. B. production of both corn and cloth is characterized by increasing costs. C. production of corn is characterized by increasing costs while the production of cloth is characterized by decreasing costs. D. production of corn is characterized by constant costs and the production of cloth is characterized by increasing costs.
Business fluctuations
A. have no influence on inflation and unemployment. B. can influence inflation and unemployment. C. influence inflation but not unemployment. D. influence unemployment but not inflation.
According to the above table, the value of MPS is
A. 0.1. B. 0.9. C. 0.2. D. increasing as real disposable income rises.