Which of the following most accurately indicates the political incentive to spend and/or tax?
a. Politicians will find tax increases more attractive than increases in government expenditures.
b. Voters will generally support higher taxes in order to eliminate budget deficits.
c. Politicians are rewarded for raising taxes and punished for providing programs that benefit their constituents.
d. Politicians are rewarded for providing programs that benefit their constituents and punished for raising taxes.
D
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Which of the following represents the largest source of income for U.S. households?
a. personal interest b. proprietor's income c. wages and salaries d. rental income e. transfer payments
One of the widely-acknowledged problems with the consumer price index (CPI) as a measure of the cost of living is that the CPI
a. fails to account for consumer spending on housing. b. accounts only for consumer spending on food, clothing, and energy. c. fails to account for the fact that consumers spend larger percentages of their incomes on some goods and smaller percentages of their incomes on other goods. d. fails to account for the introduction of new goods.
The fixed cost curve:
A. is a constant, vertical line. B. is steep when output levels are low, then flattens as output increases. C. is flatter when output levels are low, then gets steeper as output increases. D. is a constant, flat line.
The typical monopolistic competitor
A. is a large firm. B. may be a drugstore, restaurant, gas station, or dry cleaner. C. never advertises. D. has a local monopoly.