In the aggregate expenditures model, if aggregate expenditures (AE) are less than GDP, then:
a. inventory is unchanged.
b. inventory is depleted.
c. employment increases.
d. GDP decreases.
d
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Suppose the government wants to finance housing for low-income families by placing a tax on the purchase of luxury homes. Assume the government defines a luxury home as a home that is purchased for at least $1 million
This tax is consistent with the A) social equity principle. B) benefits-received principle. C) ability-to-pay principle. D) horizontal-equity principle.
Generally speaking, which of the following groups would tend to gain real income from the wealth effects of inflation?
A. People who have savings accounts at fixed rates of interest. B. People with fixed income. C. People who own assets that are appreciating faster than the inflation rate. D. People who hold all of their assets in the form of cash.
Consider the following national data: tax revenues as a percent of GDP: 25 percent; government spending as a percent of GDP: 31 percent; unemployment rate: 9 percent; inflation rate: 6 percent. What is the misery index for this nation?
A. 15 percent B. 31 percent C. 34 percent D. 53 percent