In an economy that experiences no change in its stock of capital:
A. net investment is zero.
B. the consumption of private fixed capital exceeds gross investment.
C. gross investment is zero.
D. no capital goods are being produced.
Answer: A
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The Phillips curve trade-off relationship implies that
A) there is no relationship between inflation and unemployment, at least in the long run. B) the government can fine-tune the economy and generate both the natural rate of unemployment and zero inflation. C) the government can fine-tune the economy and pick the most preferred combination of unemployment and inflation. D) low unemployment can be obtained only by generating rapidly increasing inflation.
The nominal exchange rate is .80 euros per dollar and the real exchange rate is 4/3 . Which of the following prices for a particular good are consistent with these exchange rates?
a. $4 in the U.S. and 3 euros in Italy. b. $4 in the U.S. and 3.75 euros in Italy. c. $5 in the U.S. and 3 euros in Italy. d. $6 in the U.S. and 2.50 euros in Italy.
Which of the following could be an institutional barrier to employment?
a. all of the above b. minimum wages c. labor unions d. licensing requirements
The progressive income tax is a tax based on the
A. ability-to-pay principle. B. efficiency tax principle. C. benefits-received principle. D. tax equity principle.