If the nominal exchange rate rises 5%, domestic inflation is 2%, and foreign inflation is 3%, what is the percent change in the real exchange rate?
A. 8%
B. 2%
C. 6%
D. 4%
Answer: D
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In general, the most efficient taxes:
A. are often not the most equitable. B. are often the most equitable. C. raise the most revenues. D. do not raise the most revenues.
U.S. public policy discourages saving because
a. other things the same, taxes increase the return from savings. b. means tested programs such as Medicaid provide lower benefits to those who did not save. c. none of parents' bequest to their children is taxed. d. some forms of capital income are taxed twice.
Monopolistically competitive firms are productively inefficient because long-run equilibrium occurs at an output rate where
A. Price is greater than MC. B. Diseconomies of scale exist. C. ATC is greater than minimum ATC. D. MC is greater than MR.
Refer to Figure 21.2. If area A = 2,000, area B = 400, and area C = 2,600, what is the Gini coefficient for Ruratania (rounded to two decimal places)?
A) 0.08 B) 0.15 C) 0.48 D) 0.92