Current income is 300, expected future income is 363, and the interest rate is 10%. If current income remains 300, while expected future income rises by $63, then maintaining equal consumption across time requires consumption to be
a) 330
b) 340
c) 350
d) 360
e) 370
d) 360
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If New Zealand is operating at potential GDP, which of the following is true?
i. New Zealand only has frictional and structural unemployment. ii. There is no inflation in New Zealand. iii. New Zealand has positive net exports. A) i, ii and iii B) i only C) i and ii D) i and iii E) ii only
Refer to the scenario above. If both firms operate to maximize profits, the:
A) total cost of production is minimized. B) total combined profits are minimized. C) marginal cost of both firms are minimized. D) marginal cost of both firms are maximized.
Other things being equal, the effect of a decrease in the price of Coca-Cola would cause which of the following?
a. A rightward shift in the demand curve for Coca-Cola. b. A downward movement along the demand curve for Coca-Cola. c. A leftward shift in the demand curve for Coca-Cola. d. An upward movement along the demand curve for Coca-Cola.
If a person predicts that a cut in income tax rates will decrease income tax revenues, he or she implicitly assumes that the percentage __________ in the tax base will be __________ the percentage cut in the tax rate
A) rise; less than B) rise; greater than C) rise; equal to D) fall; equal to E) none of the above