The average tax rate is
A. the ratio of additional taxes to an additional dollar of income.
B. the ratio of taxes to income.
C. the ratio of taxes to GDP.
D. the ratio of income to direct taxes.
Answer: B
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A market in which a firm emerges as a monopoly due to large economies of scale is referred to as:
A) a natural monopoly. B) a regulated monopoly. C) a legal monopoly. D) an exclusive monopoly.
An increase in aggregate demand in the economy will have what effect on macroeconomic equilibrium in the long run?
A) The price level will rise, and the level of GDP will fall. B) The price level will rise, and the level of GDP will be unaffected. C) The price level will fall, and the level of GDP will fall. D) The price level will fall, and the level of GDP will rise.
A country operates inside its production possibilities curve; this may be caused by
A) unemployed resources. B) total efficiency in industry. C) a new resource being discovered. D) a lack of modern products being produced.
If at the prevailing interest rate the quantity of money demanded is $2 trillion, and the supply of money is $1.5 trillion, then which of the following istrue?
a. There is a shortage of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market. b. There is a surplus of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market. c. There is shortage of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market. d. There is a surplus of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market.