High marginal tax rates will
What will be an ideal response?
cause some people to work and earn less than would be the case if marginal tax rates were lower.
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What type of spending is the largest component of the GDP?
A) investment B) net exports C) government purchases D) consumption expenditures
Critically evaluate the following statement made in favor of the sub-prime loan bailout of mortgage companies who made high interest rate loans to marginal credit-worthy customers
"The government should do everything within its powers to prop up ailing lenders and homeowners, just as they've done in the past with other troubled industries, from airlines to savings and loans"
What is the difference between approximate and exact consumer surplus?
A. Approximate consumer surplus is calculated using an uncompensated demand curve, while exact consumer surplus is calculated using a compensated demand curve. B. Approximate consumer surplus is calculated using a compensated demand curve, while exact consumer surplus is calculated using an uncompensated demand curve. C. There is no difference between approximate and exact consumer surplus. D. Approximate consumer surplus can be measured, while exact consumer surplus cannot be measured.
A value of the absolute price elasticity of demand equal to 0.5 indicates that
A) a 5 percent increase in price leads to a 10 percent decrease in quantity demanded. B) a 10 percent increase in price leads to a 5 percent decrease in quantity demanded. C) a 0.5 percent increase in price leads to a 1 percent decrease in quantity demanded. D) a 1 percent increase in price leads to a 5 percent decrease in quantity demanded.