Demand-pull inflation is most likely to occur during a period of
a. stagflation
b. rising input costs
c. rising unemployment
d. military expansion
e. corporate restructuring
D
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Holding other factors constant, if Congress passes a 5% investment tax credit under which a firm receives $5 in tax refunds from the government for every $100 it spends on new capital equipment, then the real interest rate will ________ and the equilibrium quantity of national saving and investment will ________.
A. increase; decrease B. increase; increase C. decrease; increase D. increase; not change
Dobson Construction has an investment project that would cost $150,000 today and yield a one-time payoff of $167,000 in three years. Among the following interest rates, which is the highest one at which Dobson would find this project profitable?
a. 5 percent b. 4 percent c. 3 percent d. 2 percent
Traditional economics argues that people know what they want better than anyone else, and this justifies the traditionalists' concentration on maximizing people's consumption.
Answer the following statement true (T) or false (F)
The principle that the cost of something is equal to what is sacrificed to get it is known as the:
A. marginal principle. B. principle of opportunity cost. C. principle of diminishing returns. D. reality principle.