According to supply-side economists, lowering corporate income taxes:
a. results in wage hikes for employees but no economic growth.
b. moves society toward greater income equality.
c. checks the expansion of real GDP and employment.
d. stimulates investment and economic growth.
e. does not create enough incentive for producers to increase production.
d
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In a supply-demand diagram, the law of supply is illustrated by
a. shifting the supply curve to the right as suppliers expand production and to the left as they contract production. b. drawing the supply curve so that it slopes upward. c. showing how the equilibrium point changes as the supply curve shifts. d. drawing a vertical line at the quantity that producers choose to supply.
Because resources tend to be specialized, if a society chooses to increase production of military goods, this tends to
A. result in a decrease in the opportunity cost of more military goods. B. result in an increase in the opportunity cost of more nonmilitary goods. C. result in an increase in the opportunity cost of more military goods. D. change the position of the production possibilities curve. E. alter the slope of the production possibilities curve.
Harry and his wife are looking for a new house. However, they cannot decide where to buy the house. Harry wants to live in Santa Cruz, while his wife wants to live in Ontario
If Harry values living in Santa Cruz at $10,000 and his wife values living in Ontario at $15,000, in which place are they likely to buy a house?
Suppose a basket of internationally traded goods that sells for $10,000 in the United States sells for €8,000 in the euro zone. According to purchasing power parity theory, the equilibrium exchange rate should be
a. $2.50 per euro b. $1.50 per euro c. $1.25 per euro d. $1.00 per euro e. $.50 per euro