Which of the following is true for taxes? They
A) are always administered fairly.
B) are a necessary part of living in an economy with a fair distribution of income.
C) are always administered without creating unfairness or inefficiency.
D) are an involuntary transfer of private property.
E) do not create a big tradeoff problem.
D
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Refer to Figure 4.1. The dominant strategy for Simon is
A) Up B) Down C) both Up and Down D) Simon does not have a dominant strategy.
If a country moves from fixed to flexible exchange rates, its macroeconomic policy
A) is no longer restricted. B) is restricted, as it can only use fiscal policy to achieve its economic goals. C) is restricted, as it can only use monetary policy to achieve its economic goals. D) must follow policy directives from the IMF.
The value of a euro goes from 1€ = US$1.25 to 1€ = US$1.50. In the United States, exports:
A. will increase, and imports will decrease. B. and imports will increase. C. will decrease, and imports will increase. D. and imports will decrease.
According to the Keynesian model, an economy will have persistent, high unemployment if:
A. the government runs a budget deficit. B. markets operate freely. C. its total spending is too low. D. firms make too many investments.