Refer to Figure 24-1. Ceteris paribus, a decrease in personal income taxes would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
A
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One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs. The growth that arises from capital accumulation is not a free lunch. It requires that society
a. conserve resources for future generations. b. sacrifice consumption goods and services now in order to enjoy more consumption in the future. c. recycle resources so that future generations can produce goods and services with the accumulated capital. d. None of the above is correct.
A Japanese flour mill buys wheat from the United States and pays for it with yen. Other things the same, Japanese
a. net exports increase, and U.S. net capital outflow increases. b. net exports increase, and U.S. net capital outflow decreases. c. net exports decrease, and U.S. net capital outflow increases. d. net exports decrease, and U.S. net capital outflow decreases.
The ratio of a country's exports to its GDP must
A) be greater than one. B) be less than one. C) equal the ratio of imports to GDP. D) be larger than the ratio of imports to GDP. E) none of the above
Which of the following statements about pollution or pollution control is TRUE?
A. The optimum amount of pollution abatement is where the total benefits of pollution abatement equal the total costs of pollution abatement. B. Private costs of pollution usually exceed social costs. C. A tax to reduce pollution levels should be based on the economic damages rather than on the absolute amount of pollution. D. A nationwide uniform tax on emissions is the appropriate way to reduce pollution levels.