A positive temporary supply side shock will:
A. increase the level of potential output in the long run.
B. decrease the price level in the long run.
C. increase the price level in the long run.
D. have no effect in the long run.
Answer: D
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a. $10million b. $15million c. $20million d. $50million
The substitution effect of a change in wage rate on a firm's demand for labor input will be more significant:
a. the greater the change in output. b. the more sharply curved are the firm's isoquants. c. the flatter are the firm's isoquants. d. the larger the quantity of labor employed.
If government debt is an external debt, the debt burden cannot be passed on to future generations
Indicate whether the statement is true or false
If an individual is taxed at a 17 percent rate for each extra dollar earned, the reference is to the
A. Average tax rate. B. Effective tax rate. C. Nominal tax rate. D. Marginal tax rate.