The question of how people's behavior changes in response to taxes:
A. has been studied and is well known today.
B. is the subject of much research.
C. was generally accepted and has recently come under examination again.
D. None of these statements is true.
B. is the subject of much research.
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Suppose that the price level was 100 in 2011, 110 in 2012, and 130 in 2013. Over these three years
A) deflation occurred at an accelerating rate. B) the inflation rate was positive but slowing. C) prices were stable. D) the inflation rate was positive and accelerating.
Refer to Figure 10-6. The loanable funds market is given in the figure above. If the current real interest rate is 5 percent, which of the following is true?
A) The quantity of loanable funds being demanded in the market is less than $90 million. B) The loanable funds market is in equilibrium. C) There is a surplus of loanable funds in the market. D) There is a shortage of loanable funds in the market.
The economist in the 1930s who is credited with key insights into causes of economic downturns was:
A. John Maynard Keynes B. Ben Bernanke C. Adam Smith D. David Ricardo