Suppose you heard a person speaking about two graphs. You couldn't make out quite what they were saying, but you saw that since 1920, the variable on the left graph showed a decreasing value, and the variable on the right graph showed an increasing value. If they asserted that the left graph variable's decrease therefore caused the right variable's increase, you would be
A. not yet convinced because you understand the fallacy of composition.
B. correctly convinced that they were wrong.
C. convinced of the soundness of their argument.
D. not yet convinced because you understand that causation and correlation are not the same.
Answer: D
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Katie had a before-tax income of $40,000 and paid taxes of $6,000 . Rinji had a before-tax income of $35,000 and paid taxes of $5,250 . Based on this information, the tax system is
a. There is insufficient information to answer the question. b. progressive c. based on the benefits received d. regressive e. proportional
The Federal Reserve Board of Governors
A. serves at the pleasure of the president similar to other cabinet positions. B. reports directly to Congress and is controlled by Congress. C. consists of 12 members, one from each district bank. D. is structurally independent of the executive and legislative branches of the federal government.
The full-employment rate of output can
A. be surpassed only when firms are not yet producing at full capacity. B. not be surpassed in either the short run or the long run. C. be surpassed in the long run only if input prices are flexible. D. be surpassed only in the short run.
Moral Hazard
A. is the fact that people will consume more health care when they pay only a percentage. B. is the fact that having insurance increases the demand for the good. C. is the fact that having insurance increases the demand for the good and it does not apply to health insurance. D. does not apply to health insurance.