Suppose that Congress allocates $5 billion to an "energy-efficient appliance rebate" program. It also raises taxes by $5 billion to keep the deficit from growing. If the marginal propensity to consume is 0.8, what is the effect on equilibrium GD
A) GDP does not change. B) GDP increases by $5 billion.
C) GDP increases by $25 billion. D) GDP increases by $4 billion.
B
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Mary has to choose between a four-day vacation and a five-day vacation to the same place. To arrive at the optimal choice, which optimization technique do you think will be arithmetically easier and faster to implement and why?
What will be an ideal response?
Trades between risk lovers and risk takers
a. Move assets to lower-value use b. Move assets to higher value use c. Create wealth d. Both B&C
Which parable describes the problem of wild animals that are hunted to the point of extinction?
a. Coase theorem b. The Tragedy of the Commons c. The Wise Woman d. The Tortoise and the Hare
The main purpose of the Laffer curve is to crudely suggest
A. how government can increase tax revenues by increasing tax rates. B. that a tax cut will lead to an increase in GDP. C. the disincentive effects of high marginal tax rates. D. the tax rate which will yield maximum revenue for the government.