Other things being equal, corrective taxation is superior to regulation in the long run because it _____
a. gives the producer an incentive to find a way to reduce external costs
b. the tax revenue can be used as compensation
c. the tax revenue can be used on other parts of the budget
d. is more burdensome on the producers of the externality
a
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If firms find that consumers are purchasing more than expected, which of the following would you expect?
A) The economy will adjust to macroeconomic equilibrium as inventories fall, and production and employment fall. B) Aggregate expenditure will likely be greater than GDP. C) Aggregate expenditure will likely be less than GDP. D) The economy will adjust to macroeconomic equilibrium as inventories rise, and production and employment fall.
If the government decreased income taxes by $500 billion and does not pursue a policy change, which of the following would require the private sector to adjust in order to finance the tax decrease?
A) Increase other taxes by $500 billion. B) Reduce transfer payments by $500 billion. C) Reduce expenditures on programs such as education or defense by $500 billion. D) Issue $500 billion in new Treasury Bonds.
Whenever there is inflation, increase in nominal gross domestic product (GDP) overstates the growth rate of the economy
a. True b. False Indicate whether the statement is true or false
Unscrupulous managers have learned ways to manipulate stock options and undermine their benefits to stockholders. Discuss some provisions that could be built into the process to curb such practices.
What will be an ideal response?