Supply-side economists argued that, given existing tax laws, the high inflation of the 1970s
a. lowered the effective tax rate on corporate income.
b. did not have any effect on the aggregate supply curve.
c. raised the effective tax rate on corporate income.
d. may have raised but probably lowered the effective tax rate on corporate income.
e. both b and c.
C
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The exchange rate last month was $1 = 1.15 euros. This month it is $1 = 1.35 euros. We can say that the value of the dollar
A) fell; causing net exports to increase and aggregate demand to rise. B) fell; causing net exports to decrease and aggregate demand to fall. C) increased; causing net exports to decrease and aggregate demand to fall. D) increased; causing net exports to decrease and aggregate demand to rise.
You have a bond that you can redeem for $10,000 one year from now. The interest rate is 10 percent (0.10) per year. How much is the bond worth today?
a. $9,090.91 b. $10,000.00 c. $8,264.46 d. $9,523.81 e. $9,000.00
If a nation starts out with very little capital
A. it is doomed to eternal poverty because it will not be able to divert productive resources from producing consumer goods to producing capital goods. B. it can quite easily divert some resources from producing consumer goods to producing capital goods. C. if it possesses a valuable commodity that the industrial world wants such as oil, it can sell its oil in exchange for plant and equipment and thus industrialize. D. None of the choices are true.
Good X is an inferior good but not a Giffen good. When the price of X increases, the consumer will consume
a. more X. b. the same amount of X. c. less X. d. more or less X depending on the size of the income effect relative to the size of the substitution effect.