A person is calculating his permanent income by adaptive expectations. Last year's permanent income was 38,000, this year's actual income is 44,000, and j = 0.25. This year his permanent income is
A) 39,500.
B) 42,500.
C) 59,000.
D) 20,500
A
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The supporters of a proposal to increase marginal taxes on those earning over $200,000 a year say this change would generate $100 billion in new tax revenues. A supply-side economist would argue that the actual revenue raised will be
A) exactly $100 billion because there are no offsetting factors to a tax increase. B) more than $100 billion, because lower income people will work harder when they perceive the tax system to be fairer. C) more than $100 billion because interest rates will also be affected. D) less than $100 billion because some people will respond by working less.
In the above figure, Mark's monthly budget line for movies and plays changed, as shown by the arrow. The change was caused by
A) a decrease in Mark's income. B) an increase in Mark's income. C) a fall in the price of a play. D) a rise in the price of a play.
Externalities are social costs that affect parties external to a particular economic transaction
a. True b. False Indicate whether the statement is true or false
Which of the following is a part of GDP?
A. The value of a haircut B. The value of an old car purchased during a year C. The value of an existing house sold during a year D. The value of a homemaker's services