The effect on the IS curve of a reduction in taxes will be less the
A) flatter is the LM curve.
B) steeper is the LM curve.
C) greater the extent of "crowding out."
D) greater is the marginal propensity to save.
D
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Dryden Press can produce 10,000 textbooks using 10 machines and 100 workers or using 5 machines and 300 workers. It can produce 20,000 textbooks using 10 machines and 300 workers or 5 machines and 600 workers. Construct a two-dimensional contour-type graph to show the relationship between the output of textbooks and the labor and machinery inputs.
What will be an ideal response?
Use the following diagram to answer the next question.
In the diagram, solid arrows reflect real flows and broken arrows are monetary flows. Flow (6) might represent
A. the purchase of armored personnel vehicles by government. B. corporate income tax payments. C. the payment of payroll taxes by households. D. the purchase of basketballs by the Ogallala school district.
Markets tend to
A) exist primarily in towns or cities. B) increase transaction costs. C) reduce transaction costs. D) make exchange more difficult.
In economic terms, religious and spiritual services are treated as: a. goods that people desire. b. resources or inputs
c. marginal benefits. d. priceless commodities.