Suppose the federal government wants to encourage businesses to increase investment spending. Which policy may be the most effective?
a. an increase in corporate income taxes
b. an increase in real interest rates
c. an increase in warnings of a coming recession
d. an increase in tax deductions for investment spending
d
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The figure above shows the production possibilities frontier for a country. A combination of 4 million gallons of milk and 4 million gallons of ice cream is
A) unattainable and production efficient. B) attainable and production efficient. C) unattainable. D) attainable and production inefficient. E) More information is needed to determine if the point is attainable or not.
If two accountants have had the same education, amount of experience, and work at the same type of job for the same profit-maximizing firm, which charges its clients a uniform hourly fee,
a. they should earn the same amount of money b. the one whose job is riskier should be paid more c. the one whose job is riskier should be paid less d. the one who has a higher marginal product (due to ability) should be paid more e. the one who has a higher marginal product (due to ability) should be paid less
If it's possible to eliminate the problems created by externalities, why do they persist?
A. Correcting externalities would always reduce total surplus. B. It is difficult to measure external benefits and costs. C. The benefits of correcting the externalities generally exceed the costs. D. None of these statements is true.
Suppose that in a certain nation the flat income tax rate of 40 percent is reduced to 35 percent and as a result the tax base falls from $400 billion to $375 billion. As a result, tax revenues __________, indicating the nation is on the __________ portion of its Laffer curve
A) rise; upward-sloping B) rise; downward-sloping C) fall; upward-sloping D) fall; downward-sloping