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
Answer: A
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In the above table, the marginal propensity to save is
A) 0.6. B) 0.8. C) 0.2. D) 0.4.
What is the Nash equilibrium of this game?
a. Cheat, Cheat b. Not cheat, Not cheat c. Sam cheats, Sarah doesn't d. Sarah cheats, Sam doesn't
The single-tax movement, headed by Henry George, refers to the idea that
A. taxes on rent are less costly to administer than other taxes. B. rent is a surplus that can be taxed without distorting resource allocation. C. rent should not be taxed because it is a free gift of nature. D. rent is based on a derived demand and should not be taxed.
A reduction in taxes on domestic financial investments usually leads to capital outflows.
Answer the following statement true (T) or false (F)