Which of the following is a justification for taxes?
a. the ability-to-pay principle
b. the progressive tax principle
c. the proportional tax principle
d. the regressive tax principle
e. the desire of the government to spend more funds
A
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If the nominal interest rate on a one-year loan was 7%, the actual inflation rate over the year was 3% and the expected inflation rate over the year was 2.5%, then the expected real interest rate equals
A) 4.5%. B) 4.0%. C) 3.75%. D) 3.5%.
The typical age-earnings cycle shows that
A) there is a positive relationship between age and earnings that eventually turns into a negative relationship. B) there is a constant positive relationship between age and earnings. C) there is a constant negative relationship between age and earnings. D) there is no relationship between age and earnings.
Pure monopoly is defined as a
a. one-firm industry. b. market structure in which there are many substitute products. c. market structure maintained by entry of many rival firms. d. market structure created by special government sanctions.
The demand for money is given by Md = $Y (0.3 - i), where $Y = 120 and the supply of money is $30. a. What is the equilibrium interest rate? b. If the central bank wants to decrease i by 2%, at what level should it set the supply of money?
What will be an ideal response?