Refer to Figure 10.7. A movement from point C to point A could be caused by
A) a negative demand shock.
B) a decrease in the term premium investors expect in the future.
C) a decrease in the default-risk premium.
D) a decrease in the expected rate of inflation.
A
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Local property tax policy generally has a small effect on the property tax base.
A. True B. False C. Uncertain
In a competition of financial analysts vs. throwing a dart to choose stocks, according Burton Malkiel, financial analysts came out ahead due to all of the following reasons EXCEPT:
A) it considered only stock prices, not dividends B) investors that followed the contest were influenced to purchase the stocks recommended by the analysts C) failure of the Efficient Markets Hypothesis D) part of the return for the analysts resulted from compensation for the higher risk of the stocks chosen
Which of the following is not an excise tax?
a. A tax on cigarettes. b. A tax on beer. c. A tax on corporations. d. A tax on airline tickets.