Given the MPS = 0.40, with no government and no foreign trade, a $10 billion increase in investment will eventually result in an increase in
A. Total spending by $25 billion.
B. Consumption by $40 billion.
C. Total spending by $2.5 billion.
D. Total spending by $15 billion.
Answer: A
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A budget deficit is best defined as the
a. shortage of spending power created by a government spending cut. b. shortage of spending power created by a tax increase. c. accumulation of past debt that has not been covered by taxes. d. amount by which a government's expenditures exceed receipts during a specific time period.
If your income is $50,000 . your income tax liability is $10,000 . and you paid $0.25 in taxes on the last dollar you earned, your
a. marginal tax rate is 20 percent. b. average tax rate is 5 percent. c. marginal tax rate is 25 percent. d. average tax rate is 25 percent.
With a corrective tax, the supply curve for pollution is
a. vertical. b. horizontal. c. upward-sloping. d. downward-sloping.
Refer to the accompanying figure. If Pat and Chris were to specialize in the task in which each has a comparative advantage:
A. Pat and Chris would each spend half of their time each task. B. both Pat and Chris would plant bulbs because they both have an absolute advantage in that task. C. Chris would plant bulbs and Pat would remove trash. D. Chris would remove trash and Pat would plant bulbs.