Would it be possible for an increase in taxation to decrease the gross domestic product measured in the U.S.? Why or why not?
Yes, it would be possible for an increase in taxation to decrease GDP. Higher levels of taxation would provide an incentive for more individuals and business to attempt to avoid taxation either legally or illegally. Such illegal activities would lead to an increase in the underground economy but a decrease in GDP.
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The percent increase in the CPI from one year to the next is a measure of the
A) real interest rate. B) inflation rate. C) GDP deflator. D) unemployment rate.
A problem with a precommitment policy is that it:
A. locks the Fed into contractionary policy. B. determines the Fed's response for a period of time. C. binds the hands of the Fed from responding to unexpected events. D. will cause the Fed to lose credibility.
The GDP deflator is:
A. one way of summarizing how prices have changed across the entire economy. B. a measure of the overall change in prices in an economy, using the ratio between real and nominal GDP. C. a weighted average of all of the individual price changes in the economy. D. All of these statements are correct.
All of the following are possible characteristics of a monopoly except:
A) there is a single firm. B) the firm is a price taker. C) the firm produces a unique product. D) the existence of some advertising.