Which of the following is a way in which a government could encourage spending on research and development?
a. Increase the tax rate on capital gains
b. Enhance patent protection
c. Decrease funding to universities
d. Increase the tax on corporate profits
e. Increase the budget deficit
B
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When the exponents of a Cobb-Douglas production function sum to more than 1, the function exhibits
A) constant returns. B) increasing returns. C) decreasing returns. D) either increasing or decreasing returns.
Firms in a monopolistically competitive market will advertise because
A) they want to differentiate their products. B) they want to increase the elasticity of the demand curve. C) of the significant differences in their product over their competitors. D) the elasticity for their product is inelastic.
If the marginal propensity to consume (MPC) in your classmate's nation is 3/5 and the marginal propensity to save (MPS) in your country is 1/10, which of the following must be true?
a. The spending multiplier is larger in your classmate's nation than in your country. b. The spending multiplier is smaller in your classmate's nation than in your country. c. Autonomous consumption is higher in your classmate's nation than in your country. d. Autonomous consumption is lower in your classmate's nation than in your country. e. Total consumption is lower in your classmate's nation than in your country.
Which of the following best describes Keynes’ view of government?
a. Government should attempt to set wages and prices when necessary to ensure that overall level of aggregate demand is sufficient for an economy to reach full employment. b. Government should manage large corporations and industries when necessary to ensure that overall level of aggregate demand is sufficient for an economy to reach full employment. c. Government should attempt to set prices and wages throughout the economy or take over and manage large corporations or entire industries directly to ensure that overall level of aggregate demand is sufficient for an economy to reach full employment. d. Government should not attempt to set prices and wages throughout the economy nor take over and manage large corporations or entire industries directly to ensure that overall level of aggregate demand is sufficient for an economy to reach full employment.