If the government institutes an investment tax credit and decreases income taxes,
a) real GDP falls, and the price level could rise, fall, or stay the same.
b) real GDP and the price level fall.
c) real GDP rises, and the price level could rise, fall, or stay the same.
d) real GDP and the price level rise.
Ans: d) real GDP and the price level rise.
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According to conventional human capital theory, college graduates earn more than high school graduates because
a. college graduates insist on a financial return on their human investments. b. college graduates are made more productive by their greater training. c. jobs that require more education must pay higher wages to attract enough workers. d. All of the above are correct.
Which of the following reflects the incentive structure confronted by a typical firm in a cartel?
a. If I alone cheat, I'm better off; if everyone cheats, I'm worse off. b. I can never do better for myself than by following agreed-upon cartel policies. c. If everyone cheats, I'm better off and so is everyone else in the cartel. d. If I suspect others are planning to cheat, I'll do best for myself by deciding not to cheat.
Which of the following activities would be calculated as part of GDP accounts?
A. Drug trafficking. B. Money laundry. C. Prostitution. D. Purchasing plastic surgery.
For each of the following pairs of products, state which are complements, which are substitutes, and which are unrelated
a. Blu-ray discs and video-on-demand b. Fiat 500 and Mini Cooper S c. Toothpaste and toothbrush d. Popcorn and snowboards e. Razors and razor blades