Which of the following is a tenet of supply-side economics?
A. High marginal tax rates severely discourage work, saving, and investment.
B. Increases in social security taxes and other business taxes shift the aggregate supply
curve to the right.
C. The Federal Reserve should adhere to a monetary rule that limits increases in the money
supply to a 5 percent annual rate.
D. Transfer payments increase incentives to work.
A. High marginal tax rates severely discourage work, saving, and investment.
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The government imposes a sales tax on hot dogs. The tax would be paid entirely by hot dog sellers if the
A) supply is perfectly elastic. B) supply is perfectly inelastic. C) demand is perfectly inelastic. D) none of the above.
Which is not a desirable property of money?
Consider two items that might be included in GDP: (1) the estimated rental value of owner-occupied housing and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
a. Both item (1) and item (2) are included in the consumption component of GDP. b. Item (1) is included in the consumption component of GDP, while item (2) is included in the investment component of GDP. c. Item (1) is included in the investment component of GDP, while item (2) is included in the consumption component of GDP. d. Only item (2) is included in GDP, and it is included in the investment component.
Which of the following can issue bonds?
A) the government B) corporations C) government agencies D) all of the above