In the classical model, a rise in the marginal income tax rate would
a. cause the price level to rise and the level of real output to fall.
b. cause the price level and the level of real output to both fall.
c. cause the price level to rise with no effect on real output.
d. leave both real output and the price level unchanged.
A
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Checking deposit are ________ the M1 measure of money and ________ the M2 measure of money.
A. excluded from; excluded from B. excluded from; included in C. included in; included in D. included in; excluded from
The role that dead capital plays in a country's economic growth is that
A) growth increases since the firms using the dead capital are using it for free. B) growth increases because the dead capital is replaced with more technologically efficient capital. C) growth neither increases nor is impaired by dead capital. D) growth is impaired since the capital cannot be allocated to its most efficient use.
Under the European System of Central Banks, the Governing Council is similar in structure to the ________ of the Federal Reserve System
A) Board of Governors B) Federal Open Market Committee C) Federal Reserve Banks D) Federal Advisory Council
If companies decrease investment spending because of lower expected returns on projects, forecasters should anticipate (everything else the same) that
A) GDP will rise. B) the money supply will fall. C) interest rates will fall. D) saving will increase.