Those who accept both the rational expectations hypothesis and the assumption of flexibility of wages and price would likely argue that
A. if policy makers are willing to accept a high inflation rate, they can reduce unemployment to a point below the natural rate.
B. policy makers can eliminate fluctuations in the level of business activity with careful planning of a widely publicized monetary policy.
C. saving and investment do not contribute to economic growth.
D. active policy making does not contribute to economic stability.
Answer: D
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Creating a competitive and legal market for human organs for transplant would make the:
A. Supply curve vertical for such organs B. Demand curve vertical for such organs C. Supply curve slope upward to the right for such organs D. Demand curve slope upward to the right for such organs
The key defining feature of oligopoly, in addition to firms' market power, is
a. collusion. b. free entry and exit. c. firms take rivals' actions into account. d. the Prisoner's Dilemma.
From the net tax function: T = t0 + t1Y, where t0 < 0 and t1 > 0, it follows that, as income rises
a. average taxes falls and the surplus declines. b. average taxes rises and the deficit increases. c. average taxes falls and the deficit declines. d. Average taxes and the deficit do not change.
For a person earning $15,000, the marginal tax amount from 10,001 to $15,000 is:
A. $500
B. $750
C. $1,750
D. $2,000