The Mayor of Stuckeyville is considering increasing the tax on bowling. He is confident that tax revenues will increase but recognizes the possibility that they may decrease. The mayor is engaging in
A. a policy that will cause the tax base to increase.
B. a policy that will cause the tax base to remain unchanged.
C. dynamic tax analysis.
D. static tax analysis.
Answer: C
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The figure above shows the loanable funds market. If the real interest rate is 2 percent, then
A) there is a surplus in the loanable funds market. B) there will be a leftward shift in the demand for loanable funds curve. C) there will be government intervention in the market to make sure there is no credit crisis. D) there is a shortage in the loanable funds market E) the demand for loanable funds curve will shift rightward.
When the value of the dollar changes from £0.5 to £0.75, then the British pound has ________ and the U.S. dollar has ________
A) appreciated; appreciated B) depreciated; appreciated C) appreciated; depreciated D) depreciated; depreciated
A multiplant firm has equated marginal costs at each plant. By doing this
A) profits are maximized. B) costs are minimized given the level of output. C) revenues are maximized given the level of output. D) none of the above
If the federal government balanced its budget, its tax revenues would be equal to government expenditures.
Answer the following statement true (T) or false (F)