If fluctuations in economic activity come from the supply side, higher inflation is associated with
A. lower interest rates.
B. structural deficits.
C. higher rates of unemployment.
D. lower rates of unemployment.
Answer: C
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How does a cap-and-trade system:
a. force polluters to internalize an externality? b. lower transactions costs? c. give incentive to polluters to find new ways to reduce pollution? d. make future pollution reductions easy to implement?
The price elasticity of demand is 5.0 if a 10 percent increase in the price results in a ________ decrease in the quantity demanded
A) 2 percent B) 5 percent C) 10 percent D) 50 percent
The ____ is the situation in which the marginal product of labor is greater than zero and declining as more labor is hired
a. law of demand b. law of diminishing supply c. law of diminishing returns d. law of returns to scale
Which of the following statements is false?
A. At this time, there is not clear consensus on what the best tax base is. B. The double taxation of saving tends to increase the saving rate because people have to save more to keep the after-tax yield constant. C. An income tax taxes savings twice only if consumption is the measure used to gauge a person's ability to pay. D. Proponents of income as a tax base argue that you should not be taxed on what you draw out of the common pot, but rather on the basis of your ability to draw from the pot.