Holding other factors constant, if the income tax is replaced with a consumption tax so that saving is not taxed, then the real interest rate will ________ and the equilibrium quantity of saving and investment will ________.
A. decrease; increase
B. increase; not change
C. increase; increase
D. increase; decrease
Answer: A
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A decrease in a wage taxes causes the opportunity cost of leisure to increase.
Answer the following statement true (T) or false (F)
The economic development strategy aimed at exporting domestically manufactured goods is called a(n):
a. replacement strategy. b. market-oriented strategy. c. inward-oriented strategy. d. outward-oriented strategy. e. future-oriented strategy.
An example of a good that is not excludable is:
A. a candy bar. B. a movie in a theater. C. fish in the ocean. D. wireless connection to the Internet.
All of the following would be included in planned aggregate expenditure EXCEPT:
A. spending on consumer durables. B. sales of domestically produced goods to foreigners. C. interest paid on the government debt. D. planned changes in inventories.