Given a nominal interest rate of 5 percent, in which of the following cases would you earn the highest after-tax real rate of interest?
a. Inflation is 3 percent; the tax rate is 15 percent.
b. Inflation is 2 percent; the tax rate is 40 percent.
c. Inflation is 1 percent; the tax rate is 50 percent.
d. The after-tax real interest rate is the same for all of the above.
c
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The $787-billion stimulus package enacted by the federal government in 2009 to try to deal with the Great Recession was intended to
A. push the aggregate expenditures schedule upward. B. close an inflationary expenditures-gap. C. shift the aggregate expenditures schedule down. D. bring inflation down.
What are the two approaches followed by the U.S. government to ease the burden on the victims of free trade?
What can you deduce about the type of good Patty’s Pizza is and about the relationship between Patty’s Pizza and Sue’s Subs?
Suppose that when the average college students income is $10,000 per year, the annual quantity demanded of Patty's Pizza is 50 and the annual quantity demanded of Sue's Subs is 80. Suppose that when the price of Patty's Pizza increases from $8 to $10 per pie, the quantity demanded of Sue's Subs increases from 80 to 100. Suppose also that when the average student's income increases to $12,000 per year, the annual quantity demanded of Patty's Pizza increases from 50 to 60 a) Patty's Pizza is a normal good and Patty's Pizza and Sue's Subs are substitutes b) Patty's Pizza is a normal good and Patty's Pizza and Sue's Subs are complements c) Patty's Pizza is an inferior good and Patty's Pizza and Sue's Subs are substitutes d) Patty's Pizza is an inferior good and Patty's Pizza and Sue's Subs are complements
Why do economists disagree on so many economic policy questions?
What will be an ideal response?