Which of the following is true of net taxes?
What will be an ideal response?
The level of net taxes varies inversely with the level of transfer payments.
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Holding all prices fixed, income-demand curves relate changes in exogenous income to changes in the quantity of a good demanded.
Answer the following statement true (T) or false (F)
Economic profit is defined as total revenue
a. plus total costs b. minus marginal costs c. minus variable costs d. minus total costs e. minus fixed costs
When the reservation wage is adjusted to account for a higher inflation rate:
a. the aggregate demand curve shifts to the right. b. the price level falls. c. the short-run Phillips curve shifts outward. d. production costs of businesses decline. e. the aggregate supply curve shifts to the right.
Which of the following is a correct conclusion regarding the successful implementation of fiscal policy?
A. Successful fiscal policy would be easy to achieve if Congress would stay out of the economy and permit natural market forces to restore full-employment equilibrium. B. Successful fiscal policy is difficult to achieve because in the real world, the investment, net exports, and consumption schedules are constantly shifting. C. Successful fiscal policy is much easier to achieve today because econometric models make economic forecasting much easier. D. As the income-expenditure model suggests, fiscal policy planners can move GDP to any level they please by changing tax and spending levels.