With time, which one of the following strategies would most likely result in an outward shift in the production possibilities curve of an economy?
a. passage of legislation reducing the workweek to 30 hours.
b. instituting a tax policy encouraging consumption at the expense of investment.
c. instituting a tax policy encouraging investment at the expense of consumption.
d. an increase in the marginal income tax rate, which would reduce the work effort of individuals.
c
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Investment (I) in the United States may increase with either an increase in national saving or an increase in net foreign investment
Indicate whether the statement is true or false
The price index is the index year with a base price other years are compared when constructing an index. The index equals 100
Indicate whether the statement is true or false
People sometimes act differently in different settings. An economist is likely to explain this by saying
A) the benefits and costs of certain behaviors can be different in different settings. B) people are hard to figure out. C) people behave as others behave. D) it is hard to figure out what makes people tick. E) none of the above
Suppose that, at a given level of disposable income, consumers decide to save more. Explain what effect this decision will have on equilibrium income. Also, explain what effect this decision will have on the level of saving once the economy has reached the new equilibrium
What will be an ideal response?