If expected inflation declines by 2%, what should happen to nominal interest rates according to the Fisher effect?
A) rise by 2%
B) fall by 2%
C) be cut in half
D) double in size
B
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In a country with floating exchange rates, the increase in the real income is the result of a(n) ________ in the money stock when capital mobility is ________
A) increase; high or low B) decrease; high or low C) increase; high D) decrease; low
The graph plotting the tax rate on the horizontal axis and tax revenues on the vertical axis, which was used by supply-side economists to suggest that tax rates were too high, in known as the
A) Beveridge curve. B) Phillips curve. C) Taylor rule. D) Laffer curve.
If we compare income percentages of total income of the lowest quintile in 1968 with 2008, we would find that it was
A. rising. B. staying about the same. C. falling.
In an industry, when the cost curve of a firm is upward sloping at low levels of output relative to the market, it implies:
a. the industry is characterized by constant returns to scale. b. the industry has a high degree of competition. c. not many firms can operate together in this industry. d. the firm can charge a price lower than competition and still cover its costs.