Refer to the diagram, in which C 3 is the before-tax consumption schedule.The after-tax consumption schedule represented by C 2 reflects:
A. a lower MPC than is embodied in C 3 .
B. a regressive tax system.
C. a proportional tax system.
D. a progressive tax system.
B. a regressive tax system.
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If your bank pays you 6% interest on a savings account and inflation is 2%, your approximate real rate of interest is
A) 2%. B) 4%. C) 8%. D) 12%.
If the value of the Euro changes from €1.1 per peso in 2009 to €1.27 per peso in 2012, we can say that there has been a(n) _____ in the value of the Euro between 2009 and 2012
a. appreciation b. devaluation c. depreciation d. acceleration
The proposition that an increase in the federal budget deficit caused entirely by a current tax cut has no effect on aggregate demand is called the
A) Ricardian equivalence theorem. B) interest rate effect. C) indirect effect. D) open-economy effect.
Why can’t the government sell surplus agricultural products it has purchased domestically?
What will be an ideal response?