The welfare cost of taxation is identical to the excess burden of taxation
a. True b. False
a
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
Labor saving nonneutral technical progress allows a firm to
A) produce more output with the same inputs. B) use less labor and the same amount of other inputs to produce the same level of output. C) use more labor to produce the same level of output. D) use less labor and more of other inputs to produce the same level of output.
"Liquidity" refers to the ability to change money into assets
Indicate whether the statement is true or false
Given the consumption function C = $500 billion + 0.80Y, an increase in disposable income from $6,000 billion to $7,000 billion will cause consumption to increase by:
A. $800 billion. B. $1,000 billion. C. $1,300 billion. D. $1,500 billion.