Suppose the tax rate on interest income from saving were reduced
a. The income effect, but not the substitution effect, would tend to reduce private saving.
b. The substitution effect, but not the income effect, would tend to reduce private saving.
c. Both the income and substitution effect would tend to reduce private saving.
d. Neither the income nor the substitution effect would tend to reduce private saving.
a
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Potential GDP is also referred to as
A) full-employment GDP. B) politico-economic GDP. C) realized GDP. D) balanced-budget GDP.
Proprietor's income is not considered part of national income
Indicate whether the statement is true or false
Under monopolistic competition ________
A) many goods and services are not standardized B) prices adjust slowly to equilibrium C) even if there is substantial competition in the market, some firms can set prices D) all of the above E) none of the above
The more flexible prices are, the
A) greater demand shifts have to be to bring about a new equilibrium. B) larger the shifts in supply will be after a change in demand. C) greater the reliance by sellers to change the nominal price. D) more quickly a shock to the economy can be absorbed.