Horizontal equity refers to a tax system in which individuals with similar incomes pay similar taxes
a. True
b. False
Indicate whether the statement is true or false
True
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Compared to adaptive expectations, rational expectations would imply that the transition between the short-run and the long-run will take:
a. the same amount of time. b. a longer period of time. c. a variable period of time. d. less time.
The opportunity cost of a particular activity
a. is the same for everyone pursuing this activity b. may include both monetary costs and forgone income c. always decreases as more of that activity is pursued d. usually is known with certainty e. measures the direct benefits of that activity
The Keynesian transmission mechanism could be blocked by either interest-insensitive investment or by the liquidity trap
Indicate whether the statement is true or false
The aggregate demand/aggregate supply model helps us to understand key ______ variables.
a. macroeconomic b. microeconomic c. determinant d. cost-push