When the government levies a tax where everyone is taxed the same fixed percentage of their incomes, this tax is known as a(n):
a. regressive tax.
b. progressive tax.
c. proportional tax.
d. excise tax.
e. luxury tax.
c
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Keynesians are skeptical of the classical theory that recessions are periods of increased mismatch between workers and jobs because
A) help-wanted advertising falls during recessions. B) help-wanted advertising rises during recessions. C) workers spend a lot of time searching for work in recessions. D) people are indifferent between being employed or not.
Which of the following is an interest rate target specified in the FOMC directive?
A) Discount rate B) Treasury bond rate C) Federal funds rate D) The prime rate
If you were a lender, which of the following unexpected changes in inflation would you prefer once you have issued a long term fixed rate loan?
a. An increase from 2% inflation to 6% inflation. b. An increase from 7% inflation to 10% inflation. c. A decrease from 14% inflation to 8% inflation. d. A decrease from 6% inflation to 3%.
Figure 7-13
Figure 7-13 shows the average total cost curves of four firms that produce milk. Some of the dairies are more productive. AR = P is the long-run price of milk. How many of these dairies will remain in the industry in the long run?
a.
all of them
b.
only 2
c.
only 3
d.
cannot determine with information given