Recent Question

The calculations governments make about tax revenues 1. "Inevitably, says Laffer, this economic growth will raise enough tax revenues to more than offset the original tax cut, thus shrinking the federal deficit and reducing inflation." Where on the Laffer curve must Laffer believe the economy is located? a) at the peak of the curve b) to the left of the peak of the curve c) to the right of the peak of the curve d) not enough informati ...

Other / Other 07 May 2016

A period of rising prices along with rising unemployment is the normal aftermath of a period 1. If the aggregate supply curve is relatively flat, but not completely flat, a) "the" multiplier when expressed in real terms should be a bigger number than when expressed in nominal terms; b) "the" multiplier when expressed in real terms should be a smaller number than when expressed in nominal terms; c) "the" multiplier when expressed in re ...

Other / Other 07 May 2016

By what percent did aggregate demand grow here 1. ”Economists said that even after taking hurricane and strike distortions into account, industrial production data signaled that manufacturers were bracing for tougher conditions.” What must have happened in the industrial production data here? an increase as producers built up inventories a decrease because producers forecast lower demand an increase because producers ...

Other / Other 07 May 2016

n increase in the national debt is more likely to be a burden on future generations 1. "Of course, if the government uses borrowed funds to invest in assets - hospitals, schools, roads, dams - which themselves have large future returns, then any costs of crowding out will be alleviated." The main cost of crowding out is that a) inflation increases b) consumption decreases c) unemployment increases d) a smaller capital stock is created ...

Other / Other 07 May 2016

Rational consumers realize that a higher deficit now means 1. "The slack exists, of course, because people continue to save even when the private sector demand for loans ebbs away. And they tend to save more, not less, in scary times." The phenomenon referred to in the second sentence acts as a) a destabilizer b) an automatic stabilizer c) a consumption booster d) a crowding out mechanism 2. "A second reason for questioning the employ ...

Other / Other 07 May 2016

Which of the following will tend to increase the size of "the" multiplier 1. Which of the following will tend to increase the size of "the" multiplier ? a) a higher marginal tax rate b) a higher marginal propensity to import c) a higher marginal propensity to consume d) a higher level of government spending 2. If you know that investment is quite volatile and you would prefer to see the economy with smaller rather than larger swings ...

Other / Other 07 May 2016

What name would economists give to hurricane and strike distortions 1. “Business organizations are more optimistic, saying the job market is so tight employers will not part with workers for fear …….” This statement is best completed with a) of inflation b) of rising wages c) they will lose experienced employees d) of unemployment 2. ”Economists said that even after taking hurricane and strike dis ...

Other / Other 07 May 2016

Which of the following would not be considered a supply-side tax cut 1. According to supply siders, the most pronounced effect of a supply-side tax cut is a a) leftward shift of the aggregate supply curve b) leftward shift of the aggregate demand curve c) rightward shift of the aggregate supply curve d) rightward shift of the aggregate demand curve 2. An increase in the overall price level that is accompanied by a short-run increa ...

Other / Other 07 May 2016

A reduced rate of inventory liquidation contributes to the recovery 1. "The only other potential bright spot observers spy on the horizon is lower personal tax rates and higher take-home pay under the federal tax reform package, that will begin in July." This is viewed as a bright spot because a) people like lower taxes b) lower taxes will combat inflation c) lower taxes will stimulate the economy d) lower taxes lower the income lev ...

Other / Other 07 May 2016

An increase in the number of discouraged workers will 1. Suppose the population over age 15 is 25 million, the participation rate is 80 percent, the number of people with full-time jobs is 16 million, and the number of people with part-time jobs is two million. If the number of discouraged workers increases by one million, what does the measured unemployment rate become? a) 5% or less b) more than 5% but less than 10% 11 c) 10% or mo ...

Other / Other 07 May 2016