Economic policy
a. always follows economic theory.
b. develops rules and principles of economics.
c. is often modified by political and social considerations.
d. All of these.
c. is often modified by political and social considerations.
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New growth theory asserts that
i. human capital grows because of choices. ii. discoveries result from choices. iii. competition brings profits. A) i only B) ii only C) iii only D) both i and ii E) both i and iii
A major criticism of static tax analysis is that it
A) uses only ad valorem taxes. B) does not use ad valorem taxes. C) ignores the incentive effects created by higher tax rates. D) assumes that the tax base will not increase.
It is possible for the balance of trade to be negative, and the current account to be positive
a. True b. False Indicate whether the statement is true or false
If a monopolist is forced to set price equal to average total cost, economic profit
a. will be negative, and the monopolist may go out of business b. will be zero c. will be positive d. will be negative, and the firm will stay in business if there are significant fixed costs e. may be positive, negative, or zero