When real Gross Domestic Product (GDP) falls, which of the following will automatically occur?
A) an increase in income tax revenues
B) a decrease in all tax rates
C) a decrease in unemployment compensation expenditures
D) a decrease in income tax revenues
D
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Refer to the figure above. Given the consumer's budget constraint, the consumption bundle that maximizes his satisfaction consists of:
A) 0 shirts and 40 pairs of trousers. B) 10 shirts and 30 pairs of trousers. C) 20 shirts and 15 pairs of trousers. D) 35 shirts and 10 pairs of trousers.
If a local government collects taxes of $500,000, has $350,000 of government consumption expenditures, makes transfer payments of $100,000, and has no interest payments or investment, its budget would
A) show a surplus of $150,000. B) show a surplus of $50,000. C) be in balance with neither a surplus nor a deficit. D) show a deficit of $50,000.
Consider demand curve D in Figure 5-2. Between points F and G, the price elasticity of demand is
Figure 5-2
a.
1
b.
0.5
c.
2
d.
0.2
e.
none of these
An increase in a country's capital stock relative to its work force is known as:
A. capital deepening. B. capital growth. C. capital improvement. D. capital augmentation.