The basic classical model can account for the procyclical behavior of money if there
A) are real business cycles caused by productivity shocks.
B) is reverse causation from future output to money.
C) are rational expectations among the public.
D) are propagation mechanisms in the economy.
B
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Economists estimate that an increase in tax rates by 8% will ________ work by ________.
A. increase; 1% B. decrease; 15% C. increase; 15% D. decrease; 1%
The fraction of capital that wears out every year is known as ________
A) gross investment B) depreciation C) net investment D) devaluation
Which of the following statements about crowding out is true?
a. It can completely offset the multiplier. b. It is caused by a budget deficit. c. It is not caused by a budget surplus. d. All of these are true.
The amount that a firm receives from the sale of goods and services is called:
A. maximum profit. B. profit. C. total revenue. D. total cost.