In essence, a consumption tax puts all saving into tax-advantaged savings accounts
a. True
b. False
Indicate whether the statement is true or false
True
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
In the figure above, if the wage rate is $6 per hour, then the
A) firms' surplus is the area d + e + f. B) workers' surplus is the area a + b + c. C) deadweight loss equals zero. D) Only answers A and C are correct. E) Answers A, B, and C are correct.
Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year, and a worker in Oatland can grow either 5 bushels of corn or 50 bushels of oats per year. There are 20 workers in Cornland and 20 workers in Oatland. If the two countries do not trade, Cornland will produce and consume 400 bushels of corn and 100 bushels of oats, while Oatland will produce and
consume 60 bushels of corn and 400 bushels of oats. If each country made the decision to specialize in producing the good in which it has a comparative advantage, then the combined yearly output of the two countries would increase by a. 280 bushels of corn and 450 bushels of oats. b. 340 bushels of corn and 500 bushels of oats. c. 360 bushels of corn and 520 bushels of oats. d. 360 bushels of corn and 640 bushels of oats.
Answer the following questions true (T) or false (F)
1. Most economists believe that labor unions significantly increase the overall unemployment rate in the United States. 2. Efficiency wage is another name for the minimum wage. 3. The unemployment rate tends to be higher in the European Union as compared to the United States.