Using the Keynesian model, the effect of a government-imposed ceiling on interest rates paid on personal checking accounts that is lower than the current market interest rate would be to cause ________ in the real interest rate and ________ in output in the short run.
A. an increase; a decrease
B. a decrease; an increase
C. a decrease; a decrease
D. a decrease; no change
Answer: B
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The time it takes for policy makers to be sure of what the data are signaling about the future course of the economy is called
A) the data lag. B) the recognition lag. C) the legislative lag. D) the implementation lag. E) the effectiveness lag.
The percentage of additional income that will have to be paid in tax is an individual's _____
a. marginal tax rate b. average tax rate c. proportional tax rate d. flat tax rate
An automobile factory in Michigan uses $100,000 worth of parts purchased from foreign countries along with U.S. inputs to produce 30 cars worth $20,000 each. Twenty of these cars are sold and 10 are left in inventory. How much did these actions add to GDP?
a. $300,000 b. $500,000 c. $600,000 d. $700,000
When services are provided and financed by local rather than higher levels of government and people can move freely among governmental units,
A) local governments will be in a strong position to exploit various groups of voters. B) a local government will always be able to generate more revenues by raising taxes. C) competition among governmental units will help residents get more for their tax dollars. D) there will be less incentive for government officials to operate efficiently than if there was only one centralized government.