When voters pay taxes in proportion to the benefits they receive from government projects
What will be an ideal response?
projects that are efficient will tend to be favored by an overwhelming majority of voters.
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Cost-push inflation can start with
A) a decrease in government expenditure. B) an increase in oil prices. C) a decrease in investment. D) a decrease in the quantity of money. E) an increase in government expenditure.
Pablo must choose among options A, B, and C. Option A gives him $10,000 for sure. Option B gives him $4,000 with probability 0.5 or $16,000 with probability 0.5. Option C gives him $8,000 with probability 0.5 or $12,000 with probability 0.5
If he receives diminishing marginal utility from wealth, Pablo will A) choose option A. B) choose option B. C) choose option C. D) be indifferent among options A, B, and C.
Explain the difference between macroeconomic variables that are in terms of levels and growth rates. Which important macroeconomic variables are which? Which one is the unemployment rate?
What will be an ideal response?
Politicians often instruct households to spend in order to help the economy. This advice overlooks the fact that
a. increases in consumption will make it easier for households to deal with unanticipated future expenses. b. increases in consumption will provide more loanable funds for investment. c. you cannot have a strong economy if all or most households are spending just about everything they earn. d. consumer spending is less than two-thirds of GDP.