The official poverty level is based on pretax income including cash. Which of the following statements is correct regarding this official specification of poverty?
A) This is a good definition of poverty since it is made up of the income from productive resources.
B) This is not a good definition of poverty because our tax structure consists of different tax brackets based on income.
C) This is not a good definition of poverty because it does not include in-kind subsidies.
D) This is a good definition of poverty because it is easy to measure.
C
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At the beginning of the year, Tom's Tubes had a capital stock of 5 tube inflating machines. During the year, Tom scrapped 2 old machines and purchased 3 new machines. Tom's capital stock at the end of year equals
A) 1 machine. B) 2 machines. C) 3 machines. D) 6 machines.
The government wishes to close a recessionary gap by increasing national income by $700 billion. The MPC = 0.8 . Two policies are offered. Policy A calls for $180 billion in increased government spending and $50 billion in increased taxes. Policy B calls for $200 billion in increased government spending and $100 billion in increased taxes. Which of the following will increase the national income
by the desired $700 billion? a. Both policies increase national income by $700 billion but Policy B offers a lower budget deficit. b. Both policies increase national income by $700 billion and create equal budget deficits. c. Neither policy increases national income by $700 billion. d. Only Policy A increases national income by $700 billion. e. Only Policy B increases national income by $700 billion.
The most important way in which inefficiency occurs is
a. producing more military goods instead of civilian goods. b. limiting economic growth by limiting capital spending. c. unemployment of labor and other resources. d. producing outside the production possibilities frontier. e. All of the above are correct.
In the early 2000s, some argued that the Indian government impeded foreign investment with tariffs, investment caps, and tons of red tape. In terms of promoting or retarding economic growth, such policies:
A. increase growth because they keep people producing for the local market. B. decrease growth because they slow the growth of capital. C. increase growth because they stop exploitation by foreigners. D. decrease growth because they cause inflation.