The impact of a $200 increase in income on quantity demanded would be called an income effect
a. True
b. False
B
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Aggregate expenditure is the sum of
a. all types of spending by households and firms b. spending and savings by households c. spending by households and governments on final goods and services d. spending by households, government, firms, and foreigners on final goods and services e. all spending and saving by households, firms, and governments
Which of the following ideas is the most plausible?
a. Reducing a high tax rate is less likely to increase tax revenue than is reducing a low tax rate. b. Reducing a high tax rate is more likely to increase tax revenue than is reducing a low tax rate. c. Reducing a high tax rate will have the same effect on tax revenue as reducing a low tax rate. d. Reducing a tax rate can never increase tax revenue.
An “opportunity cost” may be described as
A. the value of what must be given up. B. the opportunity foregone. C. the value of the next best alternative. D. the correct measure of cost. E. All of these responses are correct.
If you expect the economy is going to boom and average income in the economy will rise in the foreseeable future, the type of firm that would be able to increase its sales if your expectations are met is
A) one that sells a luxury good. B) one that sells a necessity good. C) one that sells an inferior good. D) one that sells a price-inelastic good.