An economic model is
a. a plastic scaled version of the economy
b. a complete depiction of reality
c. an abstraction of reality
d. applicable to consumer behavior but not to producer behavior
e. not an accepted tool of the economics profession
C
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If a tax cut increases people's labor supply, then
A) tax cuts increase potential GDP. B) tax cuts decrease aggregate demand. C) tax cuts decrease potential GDP because the real wage rate falls. D) tax cuts cannot affect aggregate demand. E) Both answers B and C are correct.
Measured in dollar terms, the two largest U.S. antipoverty programs are
a. cash transfers and medical care b. cash transfers and food assistance c. food and housing assistance d. medical care and food assistance e. medical care and housing assistance
The linkage between high productivity and high earnings is vitally important because
a. it provides individuals with a strong incentive to develop skills and engage in activities that others value highly. b. high productivity (a large output per hour worked) is the key to high living standards. c. it brings the self-interest of individuals into harmony with economic progress. d. all of the above are true.
If domestic saving is greater than domestic investment, then a country will have a ________ and positive net capital ________.
A. trade surplus; inflows B. trade surplus; outflows C. trade deficit; inflows D. trade deficit; outflows