According to the traditional Keynesian approach, if the government raises taxes, then
A. real Gross Domestic Product (GDP) will rise but the price level will fall.
B. real Gross Domestic Product (GDP) will remain constant but the price level will fall.
C. both real Gross Domestic Product (GDP) and the price level will falle.
D. real Gross Domestic Product (GDP) will fall and the price level will remain constant.
Answer: D
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Suppose the price of coffee is $3, the price of a bagel is $2 and a person's budget is $40. The budget line's equation is
A) $2/Qbagel + $3/Qcoffee = $40. B) $2(Qbagel) + $3(Qcoffee) = $40. C) Qbagel /$2 + Qcoffee /$3 = $40. D) Qbagel + Qcoffee = $40/($3 + $2).
If a firm is to capture all consumer surplus with two-part pricing when customers are different
A) it must be able to charge different access fees. B) it cannot charge different prices for access fees. C) it must set unit price below marginal cost. D) it must set unit price above marginal cost.
The U.S. federal income tax is classified as a
A. Regressive tax only. B. Regressive or flat tax, but not a progressive tax. C. Progressive tax only. D. Flat tax only.
The demand schedule for a good shows:
A. the specific quantity of the good that people are willing and able to sell at different prices. B. the positive relationship between the price and the quantity of the good. C. no relationship between the price and the quantity of the good. D. the specific quantity of the good that people are willing and able to buy at different prices.