If a person were given the choice of a $500 credit or a $2500 deduction,
A. he would take the deduction if he were in the 25% tax bracket, the credit if he were in the 15% tax bracket.
B. he would take the deduction if he were in the 15% tax bracket, the credit if he were in the 25% tax bracket.
C. he would take the deduction every time.
D. he would take the credit every time.
Answer: A
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When supply-side policy is successful in pushing up equilibrium real Gross Domestic Product (GDP), the reason is that the policy generates
A) a decrease in aggregate demand. B) an increase in aggregate supply. C) a decrease in employment. D) a decrease in saving.
One of the initial problems facing the newly elected President Clinton was a large budget deficit.
Answer the following statement true (T) or false (F)
In a market economy, producers will produce the goods and services that
A. Optimize producer utility. B. Consumers need the most. C. Producers want to purchase. D. Consumers demand.
When the Fed uses open market operations by purchasing Treasury securities from various financial institutions in the U.S., there will be
A) an outward shift in the supply schedule of loanable funds. B) an inward shift in the supply schedule of loanable funds. C) no shift in the supply schedule of loanable funds. D) an inward shift in the demand schedule for loanable funds.