Which of the following statements is FALSE about the issues faced by the government when contemplating a tax?
A) Consideration must be given to how tax rates relate to the amount actually received.
B) Consideration must be given to how taxes influence market prices.
C) Consideration must be given to how taxes influence equilibrium quantity.
D) Consideration must be given to the amount of funds the government will be receiving from the transfer payments paid by the public to the government.
D
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In terms of the production possibilities diagram, the principle of increasing cost simply asserts that the frontier is
A. downward sloping. B. upward sloping. C. bowed inward. D. bowed outward. E. undefined, because no market will exist in this case.
Why may some investors prefer forward contracts to futures?
What will be an ideal response?
The equilibrium effects of a temporary increase in total factor productivity include
A) an increase in the real wage and an increase in the real interest rate. B) an increase in the real wage and a decrease in the real interest rate. C) a decrease in the real wage and an increase in the real interest rate. D) a decrease in the real wage and a decrease in the real interest rate.
If the economy is inflationary, the Fed would most likely:
A. increase bank reserves by raising the discount rate. B. increase bank reserves by buying government securities C. decrease bank reserves by lowering the discount rate. D. decrease bank reserves by selling government securities.