According to Ricardian Equivalence theory, a tax cut ________
A) will tend to have little economic effect
B) will tend to reduce the magnitude of the trade-off between inflation and the rate of unemployment
C) can be an effective policy tool in the midst of an economic downturn
D) must be used in conjunction with money supply changes over the course of the business cycle
A
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When the expected profit ________, investment demand ________ and the demand for loanable funds curve shifts ________
A) falls; decreases; leftward B) rises; increases; leftward C) falls; decreases; rightward D) falls; increases; rightward E) rises; decreases; rightward
As its capital stock increases, a nation will
a. move rightward along a fixed production function b. move leftward along a fixed production function c. find its production function shifting upward d. find its production function shifting downward e. experience no change in the marginal product of labor
If the government imposes a specific tax on a monopoly, the consumer's tax incidence
A) can exceed 100%. B) will always be between 0-100%. C) may be negative. D) will be the same as when the tax is imposed on a perfectly competitive firm.
If the interest rate is positive, the present value of $1000 to be received in ten years is
A. equal to $1000. B. either greater than $1000 or less than $1000, depending upon the interest rate C. less than $1000. D. greater than $1000.