Which of the following is an example of an automatic stabilizer?
a. Congress legislates lower tax rates to increase consumption and investment.
b. Tax rates are increased during a recession to maintain a balanced budget.
c. A regressive income tax system reduces tax revenues (as a share of income) as income expands.
d. Revenues from the corporate income tax increase sharply during a business boom but decline substantially during a recession, even though no new tax legislation has been enacted.
D
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Refer to Figure 3-2. A decrease in the price of the product would be represented by a movement from
A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.
Refer to the table below. If these are the only four price options for a pound of sugar, what is the value of A?
The above table provides the possible prices for a pound of sugar next year along with the associated probabilities (in percent).
A) 0.45
B) 1.00
C) 0.10
D) 0.25
A merger between firms that are in the same industry is called a
A) conglomerate merger. B) horizontal merger. C) vertical merger. D) none of the above.
Prisoners sometimes determine a single good to be used as money. This good becomes
a. a medium of exchange and a unit of account. b. a medium of exchange, but not a unit of account. c. a unit of account, but not a medium of exchange. d. neither a unit of account nor a medium of exchange.