A proportional tax is one that
A. Rises as income rises.
B. Is collected voluntarily for specific expenditure purposes.
C. Collects the same rate on every dollar of income.
D. Falls as income rises.
Answer: C
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The greatest appeal of U.S. Treasury securities is that
A) they have high yields. B) they have no default risk. C) the U.S. Treasury will repurchase them at any time. D) their market prices fluctuate very little.
Velocity represents the average number of times that a dollar is used in purchasing final goods and services in a one-year period
a. True b. False Indicate whether the statement is true or false
The crowding-out effect is more likely to dominate the crowding-in effect when investment is relatively
A. insensitive to interest rates and to GDP. B. insensitive to interest rates but sensitive to GDP. C. sensitive to interest rates and to GDP. D. sensitive to interest rates and insensitive to GDP.
If a competitive firm is in short-run equilibrium, then
A) profits equal zero. B) it will not operate at a loss. C) an increase in its fixed cost will have no effect on profit. D) an increase in its fixed cost will have no effect on output.