Taxes are reduced by $15 billion and income increases by $75 billion. The value of the tax multiplier is
A. 9.
B. -4.
C. -5.
D. -10.
Answer: C
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For a firm in the long-run, an increase in the market wage rate will cause it to reduce the employment of labor. With fewer workers, the firm's marginal revenue product for capital
a. shifts downward leading the firm to use less capital. b. shifts upward leading the firm to use more capital. c. twists so that is becomes more elastic d. is not affected.
The shape of a firm's long-run average cost curve is determined by:
a. the degree to which each input encounters diminishing marginal productivity. b. the underlying nature of the firm's production function when all inputs are able to be varied. c. how much the firm decides to produce. d. the way in which the firm's expansion path reacts to changes in the rental rate on capital.
Suppose in 2003, President Bush and the Congress made consumer credit harder to obtain. This would have the effect of
a. shifting the investment curve up b. shifting the investment curve down c. shifting the consumption curve up d. shifting the consumption curve down e. increasing the level of investment
The elderly represent the largest demographic group in poverty
a. True b. False Indicate whether the statement is true or false