According to Baumol and Blinder, the real-world multiplier will be smaller than 1/(1 ? MPC) because the 1/(1 ? MPC) measure is based on
A. a model that ignores inflation associated with the expansion of income.
B. a model that adds taxes that tend to change as income changes.
C. a model that adds the effects of international trade.
D. a model that ignores the prices government faces
Answer: A
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In the above figure, a sales tax of $1 per unit imposed on sellers ________ the price buyers pay and ________ the price that suppliers keep for themselves
A) affects; does not affect B) does not affect; affects C) does not affect; does not affect D) affects; affects
Jane is a top-level executive earning a high salary. Jane has just ordered a luxury car only to be told that she will have to wait three weeks for it to be delivered. Which of the following statements is TRUE?
A) The car is not a scarce good. B) The car is an economic good. C) The car is human capital. D) The car is an intangible good.
The short-run aggregate supply curve is upward-sloping because: a. the quantity of real output supplied is inversely related to aggregate supply
b. nominal incomes are fixed. c. of the conjunction between the incremental capital-output ratio and the interbank offer rate. d. an increase in price will increase the supply of money.
Compared to low-income families, a larger proportion of high-income families
a. is headed by a person with a college degree. b. has both a husband and a wife who work full time. c. is headed by a person between the ages of 35 and 64. d. is all of the above.