At tax rates higher than the tax rate that maximizes tax revenues along a Laffer curve A) an increase in tax rates increases tax revenues. B) any variation in tax rates has no effect on tax revenues. C) a reduction in tax rates increases tax revenues. D) a reduction in tax rates reduces tax revenues. […]
Date: September 2nd, 2020
When Annie puts her money in her sock drawer for purchases later on, money is acting as a A) unit of accounting. B) standard of deferred payment. C) store of value. D) medium of exchange. ANSWER C
Date: September 2nd, 2020
What is the most common reason people demand money? A) Each bill and coin is a reflection of important people and events in a nation’s history. B) Since very few of us engage in a flow of transactions, money is our financial safety net. C) People desire to use money as a medium of exchange […]
Date: September 2nd, 2020
Refer to the above figure. Line BCD is called A) the consumption function. B) the 45-degree line. C) the savings function. D) the saving function. ANSWER A
Date: September 2nd, 2020
Which of the following statements correctly differentiates between a model and a hypothesis? A) Testing a hypothesis does not require data, whereas testing a model requires data. B) A model is a simplified representation of reality, whereas a hypothesis is a model’s predictions. C) A hypothesis can be used to make predictions for the future, […]
Date: September 2nd, 2020
Which of the following statements about the public debt is TRUE? A) It is equal to the budget deficit. B) It decreases when the government runs a budget deficit. C) It is a stock variable. D) all of the above ANSWER C
Date: September 2nd, 2020
Consider a closed economy without the government. If the savings rate in the economy is 15% and the aggregate savings is $6,000, the GDP of the economy is: A) $15,000. B) $27,000. C) $40,000. D) $30,000. ANSWER C
Date: September 2nd, 2020
Consider a closed economy without the government. If the GDP of the economy is $63,000 and the consumption in the economy is $45,000, the savings rate in the economy is: A) 35.75%. B) 28.57%. C) 16.86%. D) 24%. ANSWER B
Date: September 2nd, 2020
If the nominal interest rate in an economy is 4% and the real interest rate in the economy is 2%, the rate of inflation in the economy must be: A) -2%. B) 4%. C) 2%. D) 0.5%. ANSWER C
Date: September 2nd, 2020
A situation in which spending exceeds income is A) average propensity to save. B) dissaving. C) the saving function. D) the consumption function. ANSWER B
Date: September 2nd, 2020
