One form of economic stimulus that state governments can use is to exempt certain types of purchases from state sales tax
For example, a law that permanently exempts business equipment from state sales tax may stimulate purchases of these goods because the law effectively reduces the price of the equipment. Business equipment such as computers or vehicles are durable goods, so should we expect the tax exemption program to have more impact on equipment demand in the short run or long run? A) More impact in the long run because business equipment demand becomes more income elastic in the long run
B) More impact in the long run because business equipment demand becomes more price elastic in the long run
C) More impact in the short run because business equipment demand becomes more income elastic in the long run
D) More impact in the short run because business equipment demand becomes more price inelastic in the long run
D
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What two factors are the keys to determining labor productivity?
A) technology and the quantity of capital per hour worked B) the growth rate of real GDP and the interest rate C) the average level of education of the workforce and the price level D) the business cycle and the growth rate of real GDP
In the dollar:pound foreign exchange market, is it always true that when the demand for dollars rises the supply of pounds falls?
a. Yes. This is always true. b. No. This is not always true. c. Like most things in life, it depends on a variety of other factors.
The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
The country with the largest trade deficit as a percentage of GDP in 2009 was
A. Japan. B. United States. C. France. D. Canada.