Which of the following would be an example of expansionary fiscal policy?
A) An increase in the individual income tax rate.
B) Extending the period in which unemployed workers can collect unemployment benefits.
C) A decrease in the amount of federal grants given to college students
D) A decrease in interest rates.
Ans: B) Extending the period in which unemployed workers can collect unemployment benefits.
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Two countries are experiencing 10% money growth a year. However, country A is growing at 2% and country B is growing at 5%. Which country will have the higher inflation rate?
What will be an ideal response?
In a market economy, persons undertaking an investment project must
a. obtain approval from political authorities before the project can be undertaken. b. either personally supply the required funds or convince other investors and financiers to do so. c. finance the project entirely with equity capital. d. arrange for bank financing before the project can be undertaken.
Absent any violations of the conditions underlying the first welfare theorem, the competitive market equilibrium is efficient if and only if tastes are quasilinear.
Answer the following statement true (T) or false (F)
If DeShawn only pays $25,000 to purchase a new car even though he would have been willing to pay as much as $35,000 for the car, this indicates that
a. DeShawn is an irrational consumer. b. The seller earned a $10,000 profit on the sale of the car. c. DeShawn reaped $10,000 of consumer surplus from the transaction. d. The seller received $10,000 worth of producer surplus on the transaction.