Which of the following is an example of a positive externality?
Figure 2-5 shows five different points along the production possibilities frontier for a
country that produces rockets and cruise ships. If the country is currently operating at
point C and decided to move to point B,
Why would workers and retirees want to have their wages and benefits indexed to the
Consumer Price Index (CPI)?
a. To lower their purchasing power during years of rising prices
b. To maintain their purchasing power during years of rising output
c. To maintain their purchasing power during years of declining output
d. To increase their purchasing power during years of negative inflation
e. To maintain their purchasing power during years of rising prices
Economics is
When the economy is operating at an unemployment rate below the full employment
rate,
a. actual output is above potential output
b. actual output equals potential output
c. actual output is below potential output
d. frictional unemployment has been eliminated
e. structural unemployment has been eliminated
If the demand for good A is more elastic than the demand for good B, a small increase
in supply in both markets will cause
Suppose the marginal propensity to consume is 0.80 and taxes decrease by $10 billion.
Which of the following is true?
a. Disposable income and consumption fall by $10 billion
b. Disposable income and consumption rise by $10 billion
c. Disposable income rises by $10 billion and consumption rises by $8 billion
d. Disposable income falls by $10 billion and consumption falls by $8 billion
e. Disposable income rises by $10 billion and consumption falls by $8 billion
The Earned Income Tax Credit
According to the classical model, if the government lowers its budget deficit, which of
the following will occur?
a. The interest rate will rise, and consumption, investment and output will all decrease.
b. The interest rate will fall, consumption and investment will increase, but output will
not change.
c. The interest rate will rise, and consumption, investment and output will all increase.
d. The interest rate will fall, and consumption, investment and output will all increase.
e. The interest rate will fall, consumption will not change, but investment and output
will both increase.
When a nation begins to import a good,
a. the domestic price of that good will fall
b. domestic consumers are harmed
c. the domestic price of that good will rise
d. domestic producers benefit
e. the quantity produced domestically will rise