As the rate of interest on borrowed funds increases, the quantity of investment funds demanded diminishes.
Answer the following statement true (T) or false (F)
True
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In the Keynesian model, whenever unplanned inventory increases occur in the economy, production is likely to
a. speed up slowly. b. slow down. c. remain unchanged. d. speed up immediately.
Mention some of the ways in which the problem of asymmetric information can be reduced
According to supply-side fiscal policy, reducing tax rates on wages and profits will:
a. create demand-pull inflation. b. lower the price level but may trigger a recession. c. reduce both unemployment and inflation. d. result in stagflation.
Which of the following is an example of a payroll tax?
a. a tax on the wages that a firm pays its workers b. a "sin" tax on distilled alcohol c. a tax on corporate profits d. the portion of federal income taxes earmarked to pay for national defense