The Great Depression had led economists to suggest a larger role for
A) market mechanism.
B) government intervention.
C) price mechanism.
D) international trade.
B
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What will be an ideal response?
Suppose a negative income tax program is established at 25 percent, and a poverty threshold minimum of $15,000 is guaranteed for a family of four. If the family earns $10,000 through working, its total income would equal
a. $10,000 b. $15,000 c. $17,500 d. $22,500 e. $25,000
The rate of return that owners of capital must receive in order to induce them to continue supplying the capital is often referred to as
a. accounting profit. b. the normal or market rate of return. c. economic profit. d. the accounting rate of return.
The supply-side effects of a reduction in taxes are the result of
a. increases in the disposable income of households accompanying reductions in tax rates. b. the stimulus effects of increases in government expenditures. c. increased attractiveness of productive activity relative to leisure and tax avoidance. d. reductions in interest rates that generally accompany expansionary fiscal policy.