With capitalism, the allocation of goods and resources is determined by
a. market forces
b. centralized planning
c. government policy
d. traditional customs
Ans: a. market forces
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The practice of parents giving their children an amount of land similar to what they received from their parents is known as a
(a) targeted bequest. (b) strategic bequest. (c) life cycle bequest. (d) investment bequest.
What would happen in an economy if total planned production exceeded total planned real expenditures?
A) Inventories would be depleted, and firms would tend to lower prices. B) Inventories would accumulate, and firms would tend to lower prices. C) Inventories would be depleted, and firms would tend to raise prices. D) Inventories would accumulate, and firms would tend to raise prices.
Steve purchases some land for $30,000 . He maintains it, but makes no improvements to it. One year later he sells it for $32,000 . Stephanie puts $30,000 in a savings account that pays 6% interest. Steve has to pay the 50% capital gains tax, Stephanie is in the 35% tax bracket. The inflation rate was 2%. Who had the higher before-tax real gain and who had the higher after-tax real gain?
a. Steve had both the higher before-tax real gain and the higher after-tax real gain. b. Steve had the higher before-tax real gain but Stephanie had the higher after-tax real gain. c. Stephanie had the higher before-tax real gain but Steve had the higher after-tax real gain. d. Stephanie had both the higher before-tax real gain and the higher after-tax real gain.
Long-run economic growth can be achieved with
A. Neutral monetary policy. B. Contractionary fiscal policy. C. A rightward shift in the long-run aggregate supply curve. D. A rightward shift in the aggregate demand curve.