A capital gains tax acts to
A) reduce the interest rate received by loan demanders.
B) increase the interest rate received by loan demanders.
C) increase the interest rate received by loan suppliers.
D) reduce the interest rate received by loan suppliers.
D
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
In the long run, what is the tradeoff between inflation and unemployment? Explain your answer using Phillips curve analysis
What will be an ideal response?
The principle of decreasing marginal benefit explains why the marginal benefit curve
A) is upward sloping. B) has an infinite slope. C) is vertical. D) is downward sloping. E) is horizontal.
The proportion of the U.S. population below the poverty line
A. rises with upturns of the business cycle. B. has declined, though somewhat erratically, over the past 40 years. C. has been virtually eliminated by a vigorous "War on Poverty." D. covers roughly 20% of the same people year after year.