A decrease in government purchases or an increase in taxes, other things being equal, will tend to:
a. increase interest rates and decrease investment as a result.
b. increase interest rates and increase investment as a result.
c. decrease interest rates and decrease investment as a result.
d. decrease interest rates and increase investment as a result.
d
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A major disadvantage of a corporation is
a. its weakness at raising funds. b. its inability to limit the financial liability of the owners. c. the double taxation of its profits. d. its lack of continuity in the event of a stockholder’s death.
The invisible hand is closely related to each of the following, except
A. supply and demand. B. the price mechanism. C. competition. D. fairness or equity.
Suppose Rita obtains 10 units of utility from the last dollar of income received by her, and Joseph obtains 6 units of utility from the last dollar of his income. Assume both Joseph and Rita has the same capacity to derive utility from income. Those who favor an equal distribution of income would:
A. Advocate redistributing income from Joseph to Rita B. Advocate redistributing income from Rita to Joseph C. Be content with this distribution of income between Rita and Joseph D. Argue that any redistribution of income between them would increase total utility
When actual real GDP is below natural real GDP, we say that
A) the output gap is positive. B) the output gap is negative. C) the output gap has been eliminated. D) the output gap cannot be calculated.