Which of the following will not occur as the result of a decrease in net taxes?
A) decreased household saving
B) decreased government saving
C) a shift to the left of the supply curve for loanable funds
D) all of the above
Answer: A
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Refer to Figure 11.2. Assume the economy is in equilibrium at 1, where real GDP equals potential GDP, and then the economy experiences a negative demand shock. Other things equal, the negative demand shock is best represented by a(n)
A) movement up along the Phillips curve. B) movement down along the Phillips curve. C) upward shift of the Phillips curve. D) downward shift of the Phillips curve.
A major Internet service provider decides to spend $70 million to purchase new server equipment. If the marginal propensity to consume is 0.8, the eventual change in GDP will be
a. $40 million. b. $50 million. c. $90 million. d. $350 million. e. $850 million.
Moral hazard occurs when:
a. Individuals and institutions do not bear the full cost of their own mistakes. b.Individuals and institutions make immoral decisions based on greed. c. General social decay leads to unethical business decisions. d. Warning lights for potential economic hazards are ignored. e. All of the above are examples of moral hazard.
A promise of a $100 payment to be received one year from today is:
A. equally valuable as a payment received today if the interest rate is zero. B. less valuable than receiving the payment two years from now. C. more valuable than receiving the payment today. D. not enough information is provided to answer the question.