The effects of tax cuts or government spending dissipate and each additional change in consumption and income becomes smaller and smaller because
A) some of the increase in income will be lost through taxation.
B) some of the increase is saved and does not result in an increase in consumer demand.
C) some of the increase in consumption will be an additional demand for imported goods.
D) All of the above.
E) None of the above.
D
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Refer to the production possibilities frontier in the figure above. Which of the following movements requires the largest opportunity cost, in terms of good Y forgone, per extra unit of good X?
A) from point a to point b B) from point b to point c C) from point c to point d D) from point d to point e
Every economic model should include money as a variable. This statement is
A) true, because every transaction in the economy uses money. B) true, because the federal reserve is very important. C) false, because some transactions in the economy are transacted without money. D) false, because a model can get unnecessarily complex if it includes money.
In 2011, which country had the highest level of GDP per hour of work?
a. Spain b. the United Kingdom c. France d. Japan
A bond is
A) a debt instrument, that is, the issuer has taken out a loan. B) an equity instrument, that is, the buyer has purchased ownership in the issuer's firm. C) the same thing as a stock. D) a short-term loan from the government.