An expansionary fiscal policy may be:
A. offset by lowering tax rates.
B. reinforced by raising tax rates.
C. partially offset by the crowding-out effect.
D. reinforced by the crowding-out effect.
Answer: C
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Moral hazard occurs because people act
A) in the interest of others at all time. B) in the best interest of society. C) in their own self-interest. D) like anarchists.
If Franco's Pizza Parlor knows that the marginal cost of the 500th pizza is $3.50 and that the average total cost of making 499 pizzas is $3.30, then
a. average total costs are rising at Q = 500. b. average total costs are falling at Q = 500. c. total costs are falling at Q = 500. d. average variable costs must be falling.
Surplus
What will be an ideal response?
If a bank deposit will double in value in 18 years, the rule of 72 implies that the interest rate on the deposit must equal is approximately:
A. 8 percent. B. 6 percent. C. 4 percent. D. 3 percent.