Which of the following does not affect marginal costs?
A. An increase in property taxes.
B. An increase in state unemployment taxes.
C. An increase in payroll taxes.
D. A decrease in Social Security taxes.
Answer: A
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Answer the next question using the following budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$450$425$2,000Year 25004503,000Year 36005004,000Year 46406205,000Year 56805804,800Year 66006205,000If year 1 is the first year of this nation's existence and year 4 is the present year, the public debt as a percentage of GDP in year 4 is
A. 3.9%. B. 2.5%. C. 1.39%. D. 7.5%.
If the Federal Reserve chooses to fight high inflation with contractionary monetary policy and firms and consumers expect this policy to reduce inflation, which of the following would you expect to see?
A) a downward shift of the short-run Phillips curve B) a decrease in the long-run aggregate supply curve C) an increase in inflationary expectations D) a reduction in the unemployment rate
Refer to Figure 5-4. What does S1 represent?
A) the market supply curve that reflects private cost B) the market supply curve that reflects only private benefit C) the market supply curve that reflects only external cost D) the market supply curve that reflects social cost
If a firm decides to produce no output in the short run, its costs will be:
A. its marginal costs. B. its variable costs. C. its fixed costs. D. zero.