An increase in the income tax ________ potential GDP by shifting the labor ________ curve ________
A) decreases; demand; leftward
B) increases; demand; rightward
C) decreases; supply; rightward
D) decreases; supply; leftward
E) increases; supply; rightward
D
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The Scarcity Principle tells us ________, and the Cost-Benefit Principle tells us ________.
A. how to make choices; that choices must be made B. that choices must be made; how to make good choices C. that good choices eliminate scarcity; how to make good choices D. how to make good choices; that choices involve costs and benefits
An example of an automatic stabilizer is:
A. reduced unemployment rates during a boom means more people working, and the government pays less out in food assistance. B. increased unemployment rates cause the government to pay out more in unemployment insurance. C. increased tax revenues due to nominal income going up during a boom. D. All of these are examples of automatic stabilizers.
Why were the U.S. government budget deficits of the 1980s and early 1990s so unusual from a historical point of view?
A. It was the first time that deficits diverted funds from other productive uses, such as investment in modern equipment. B. It was the first time that deficits were accompanied by very high rates of inflation. C. In the past, deficits were usually that large only in wartime. D. It was the first time the U.S. government had ever run deficits.
Which idea is inconsistent with pure competition?
A. Price-taking behavior B. Product differentiation C. Freedom of entry or exit for firms D. A large number of buyers and sellers