Based on our understanding of the determinants of the interest rate and bond prices, we know that a reduction in income will cause
A) an increase in bond prices and an increase in the interest rate (i).
B) a reduction in bond prices and an increase in i.
C) an increase in bond prices and a reduction in i.
D) a reduction in bond prices and a reduction in i.
E) none of the above
C
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What, according to neoclassical growth theory, is the fundamental cause of economic growth?
What will be an ideal response?
As the MPC gets close to 1, the value of the multiplier approaches
a. 0. b. 1. c. infinity. d. None of the above is correct.
A pollution tax:
A. decreases the price of the good taxed. B. increases the price of the good taxed. C. does not affect the quantity demanded of the good taxed. D. does not affect the price of the good taxed.
When the production or consumption of some good or service inflicts costs on a third party without compensation it is called a(n) __________ __________.
Fill in the blank(s) with the appropriate word(s).