An economy has two workers, Paula and Ricardo. Every day they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. What is the opportunity cost for Paula to produce one computer?
A. 1 shirt
B. ¼ shirt
C. ½ shirt
D. 4 shirts
Answer: D
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In nations where conventional taxes are difficult to collect, the inflation tax is ________, which tends to ________ the inflation rates of those nations
A) also difficult to collect, aggravate B) also difficult to collect, hold down C) a realistic alternative, aggravate D) a realistic alternative, hold down
A competitive market may misallocate resources over time because
A. current profits are worth more than future profits because of the time value of money. B. current profits are worth less than future profits because of the time value of money. C. the Federal Reserve sets interest rates different than the opportunity cost of consuming now versus later. D. the Federal Reserve always prefers capital investment over personal consumption.
Automatic stabilizers are considered
A) discretionary fiscal policies. B) discretionary monetary policies. C) non-discretionary fiscal policies. D) non-discretionary monetary policies.
Which are contractionary fiscal policies?
a. Increased taxation and decreased government spending b. Increased taxation and increased government spending c. No change in taxation and increased government spending d. Decreased taxation and no change in government spending