A government economist states that "[t]he collection of personal income tax revenues automatically falls during a recession." This statement best describes how the progressive income tax system:
A. increases crowding out in the economy.
B. offsets the timing problem for fiscal policy.
C. decreases real interest rates in the economy.
D. serves as an automatic stabilizer for the economy.
Answer: D
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If a small country were to levy a tariff on its imports then this would
A) decrease the country's economic welfare. B) have no effect on that country's economic welfare. C) increase the country's economic welfare. D) change the terms of trade. E) raise prices on its exports in other countries.
Microeconomics is the branch of economics in which you study inflation and unemployment in the economy
a. True b. False Indicate whether the statement is true or false
Suppose a purely competitive, increasing-cost industry is in long-run equilibrium. Now assume that a decrease in consumer demand occurs. After all resulting adjustments have been completed, the new equilibrium price:
A. and industry output will be less than the initial price and output. B. will be greater than the initial price, but the new industry output will be less than the original output. C. will be less than the initial price, but the new industry output will be greater than the original output. D. and industry output will be greater than the initial price and output.
In 2011, the three largest economies in the world were (listed in order, from largest):
A. The U.S., China, Germany B. China, the U.S., Japan C. The U.S., China, Japan D. China, the U.S., Germany