The smaller the amount saved out of a change in disposable income, the
A) more horizontal the consumption function.
B) larger the MPC.
C) more net taxes affect consumption.
D) smaller is autonomous consumption.
E) smaller the MPC.
B
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Suppose there are two policy options facing a vote in the Senate. In the first, government spending will increase $50 billion, while the second option is to cut taxes by $50 billion. A Keynesian economist would argue for
A) the spending option because it has a bigger impact on total spending. The spending directly raises total spending plus it works through the multiplier, while the tax cut only works through the multiplier. B) the tax option because it is easier to pass. The effects on total spending would be identical. C) the spending option because it won't affect the deficit the way the tax cut would. D) the tax option because it also affects the incentives workers face. Long-run aggregate supply will increase with the tax cut, but not with the spending increase.
The supply of loanable funds curve shifts leftward if the real interest rate rises
Indicate whether the statement is true or false
What is the term for taxes that governments place on imported goods for a variety of reasons?
a. barriers b. tariffs c. goods taxes d. import taxes
Winner-take-all markets explain
A. why no one ever remembers who came in second. B. why top paid corporate executives, professional athletes, and entertainers earn such high salaries. C. why nominal wages are always higher than real wages. D. why real wages are tied to productivity.