If each taxpayer paid the same lump-sum amount regardless of income level, the tax system would be:
A. disproportionate.
B. progressive.
C. proportional.
D. regressive.
Answer: D
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Barriers to entry serve to limit the number of firms that operate in a particular market and, as such, reduce the amount of total profit earned in the market
Indicate whether the statement is true or false
The aggregate demand curve will shift outward and to the right when the Federal Reserve undertakes which of the following monetary policies?
a. Open market purchases of government securities b. An increase in the discount rate c. An increase in the reserve requirement d. A reduction in loans to the U.S. Treasury e. A more lenient supervision of savings and loan institutions
Unemployment that results from fundamental technological changes in production, or from the substitution of new goods for customary ones, is
a. the natural rate of unemployment b. not counted as detracting from full employment c. cyclical unemployment d. frictional unemployment e. structural unemployment
When Jeff bought a house he also bought homeowners insurance, but when he bought a new dishwasher he refused to buy the repair insurance policy the store offered. Assuming Jeff is rational in his choices, which of the following is the most likely cause of his behavior?
A. The expected loss from dishwasher failure is less than the insurance premium and he can afford to absorb smaller losses. B. The probability of his house burning is greater than the probability a dishwasher failure. C. He switches back and forth between risk averse and risk loving preferences. D. He doesn't trust appliance insurers because they have no agent to relate to.