If the government of a country wants to increase the supply of loanable funds, it should:
a. charge a higher rate of tax on the income that is saved
b. charge a lower rate of tax on the income that is saved.
c. charge a higher rate of tax on the income that is invested.
d. charge a lower rate of tax on the income that is consumed.
b
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Answer the next question on the basis of the following information about the opportunity costs of two products-fish (F) and chicken (C)-in countries Singsong and Harmony. Assume that production occurs under conditions of constant costs and these are the only two nations in the world. Finally, the opportunity costs of fish in terms of chicken are: Singsong: 1F = 2C, Harmony: 1F = 4C. Which one of the following would not be feasible terms for trade between Singsong and Harmony?
A. 1 fish for 3 chickens B. 1 fish for 2-1/2 chickens C. 1 chicken for 1/5 of a fish D. 1 chicken for 1/3 of a fish
Free markets produce relatively high levels of efficiency but low rates of growth
a. True b. False Indicate whether the statement is true or false
An increase in the price of fuel increases the average cost of production of fabric produced by the Houchen Textile Company, a competitive firm. As a result of the increase in the price of fuel,
a. average cost of production will increase, but there will be no change in the profit-maximizing level of output. b. average cost of production will increase and the profit-maximizing level of output will decline. c. fixed costs of production will increase. d. average cost of production will increase, as will the profit-maximizing level of output.
Initially trade between Australia and the United States is balanced. Then, if a change in the exchange rate increases the U.S. dollar price of Australian goods, ceteris paribus, we would expect
A. a trade deficit in both countries. B. a trade deficit in Australia. C. a trade deficit in the United States. D. a trade surplus in the United States.