Which of the following is considered investment?
A) Johnny buys a new car for his wife as an anniversary gift.
B) James purchases a new car to replace an old car in his cab business.
C) Maina purchases a new car for commuting to and from work.
D) Jane purchases a new car for commuting to and from school.
B
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In the long run, a reduction in labor supply would cause output to ________ and the aggregate price level to ________
A) fall; rise B) fall; fall C) rise; fall D) rise; rise
The Keynesian consumption function does not display consumption smoothing, because ________
A) the average propensity to consume rises with income B) the marginal propensity to consume is constant C) consumption is not affected by the real interest rate D) consumption is not affected by future income
In the spring of 1993, President Clinton proposed an energy tax. At one point in the congressional review of the proposal there was discussion of various exemptions for farmers, truckers, etc. One plan was to dye fuel different colors to better track the appropriate tax on the user of the fuel. Economists would label these exemptions
a. loopholes. b. economically efficient. c. obviously fair. d. all of the above.
Contraction of the money supply can aggravate a recession.
Answer the following statement true (T) or false (F)