Assuming that charitable giving is a normal good, the income effect of a decrease in personal tax rates would lead to
A. more giving because households would have more disposable income.
B. more giving because giving to charity would become less expensive relative to other goods.
C. less giving because giving to charity would become more expensive relative to other goods.
D. less giving because households would spend that money on luxury goods.
Answer: A
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In Taylor Rule equation, high value of parameter a indicates that
A) Fed cares more about avoiding recessions and high unemployment than about avoiding inflation. B) Fed cares more about avoiding inflation than about avoiding recessions and high unemployment. C) Fed cares more about avoiding recessions than about avoiding high unemployment. D) Fed cares more about avoiding high unemployment than about avoiding recessions.
Which of the following measures gives the earliest warning of increasing inflation?
A. the Producer Price Index B. the Personal Consumption Expenditure Index C. the Consumer Price Index D. All of these should signal the same short-run inflation.
According to the text, which of the following is a form of water pollution?
A. Smog. B. Thermal pollution. C. Slaughter waste. D. The greenhouse effect.
Purchasing power parity theory holds that exchange rates are set so that the price of similar goods in different countries reflects the relative interest rates in those countries.
Answer the following statement true (T) or false (F)