Identify three government policies that discourage saving
First, the returns to saving are heavily taxed (which is why some economists advocate a consumption tax). Second, there is double taxation of some forms of capital income. Third, bequests above some level are taxed, which limits parents' incentives to save for their children. Fourth, some government benefits are means-tested, so a household that saves is less likely to receive such benefits.
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Affirmative action laws require employers to hire specified numbers of minorities
a. True b. False Indicate whether the statement is true or false
Normative conclusions
a. come from positive analysis alone. b. are based on ignorance of positive analysis. c. involve value judgments. d. reflect the economist's role as scientist.
An adverse supply shock causes inflation to
a. rise and the short-run Phillips curve to shift right. b. rise and the short-run Phillips curve to shift left. c. fall and the short-run Phillips curve to shift right. d. fall and the short-run Phillips curve to shift left.
Suppose that the implicit cost for a business was $2,000 and the explicit cost was $5,000 and that the firm sold 1,000 units of its products at $7 per item. We can conclude that the firm's
A. accounting and economic profits were both $0. B. accounting profit was $7,000, and its economic profit was $0. C. accounting profit was $2,000, and economic profit cannot be determined. D. accounting profit was $2,000, and economic profit was $0.