Workers bear the bulk of the payroll tax when labor supply is very elastic.
Answer the following statement true (T) or false (F)
False
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Sequential games are often used to analyze which two types of business strategies?
A) deciding to end production of an unprofitable product and deciding to shut down temporarily B) deciding to merge with another firm and deciding how much to spend on an advertising campaign C) deterring entry by another firm and bargaining between firms D) whether to invest in research and development and whether to offer employees an early retirement package
If the government increases spending while holding taxes constant, we expect
A) a decrease in real saving as consumers follow suit and also increase borrowing. B) planned real investment spending by businesses to increase. C) an increase in investment spending by businesses too, as they anticipate future economic growth. D) interest rates to rise.
The quantity theory of money implies that the price level will be stable (no inflation or deflation) when the growth rate of the money supply equals
A) 0. B) the growth rate of real GDP. C) the growth rate of the velocity of money. D) the growth rate of the price level.
Empirical evidence shows that in the short run, purchasing power parity ________, and in the long run, purchasing power parity ________
A) holds; does not hold B) holds; holds C) does not hold; holds D) does not hold; does not hold