Josh pays $6,000 in taxes and earns $60,000. Maggie pays $4,000 in taxes. If the tax system is progressive, then Maggie earns:
A. less than $40,000.
B. $40,000.
C. more than $60,000.
D. more than $40,000 but less than $60,000.
Answer: D
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Indicate whether the statement is true or false
A negative shock in aggregate demand will likely result in ________
A) a permanent change in output, if the central bank responds by lowering interest rates B) no permanent change in the equilibrium inflation rate, unless the central bank responds by lowering interest rates C) an eventual increase in aggregate supply for any inflation rate, if the central bank responds by lowering interest rates D) all of the above E) none of the above
Firms operating in a _____ market sell their products in a market where other firms produce identical products
a. monopoly b. perfect competitive c. monopsony d. duopoly
Other things the same, an increase in velocity means that
a. transactions per dollar increase so the price level rises. b. transactions per dollar increase so the price level falls. c. transactions per dollar decrease so the price level rises. d. transactions per dollar decrease so the price level falls.