Which one of the following states a central element of the economic way of thinking?
What will be an ideal response?
Incentives matter—human choice is influenced in predictable ways by changes in personal costs and benefits.
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Stock is a form of
A) dividend. B) debt. C) equity. D) lending.
Steel producers offer to sell steel to U.S. auto producers at a much lower price than in the past. As a result one would expect: a. no change in the supply of automobiles
b. an increase in the demand for automobiles. c. an increase in the supply of automobiles. d. a decrease in the supply of automobiles.
The incentive to consume tax-deductible goods, instead of nondeductible goods, increases when
a. marginal tax rates are high. b. marginal tax rates are low. c. the inflation rate is low and relatively stable. d. This is a trick question: the consumption of tax-deductible goods is not affected by marginal tax rates.
What is the "beggar-thy-neighbor" policy, and why is it a problem for the country that caused it?
What will be an ideal response?