Large deficits can retard economic growth.
Answer the following statement true (T) or false (F)
True
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Classical economists think that lump-sum tax changes
A) should be used to smooth business cycles. B) have a powerful effect on the economy. C) affect aggregate demand after a lag. D) have no effect because of Ricardian equivalence.
An upright vacuum manufacturer is losing ground in the marketplace to manufacturers selling robotic models that offer smart technology. How might this impact the company’s demand curve for labor?
a. It would shift upward. b. It would shift downward. c. It would shift to the right. d. It would shift to the left.
Using Figure 1.3 and PP1, at point A,
A. The available technology keeps production inside PP1. B. An increase in the production of mops would definitely require a decrease in the production of brooms. C. There is inefficient use of available resources. D. All available resources are being used efficiently.
Suppose the capital gains tax is 28 percent and you purchased a house ten years ago for $80,000. If you sold the house today you would get $140,000. Your tax liability would be
A. $39,200. B. $16,800. C. indeterminate without knowing the inflation rate. D. indeterminate without knowing the personal income tax rate.