If households
If households become more willing to hold less cash and more stocks or bonds, the
What happens when AD > AS past to full employment level of employment?
When firms bear the legal incidence of a tax, this is backward shifted while: (1) firms burden consumers by raising their prices. (2) the tax burden is borne by workers in the form of lower wages. (3) resource suppliers seek higher factor payments to
Consider a model economy with a production function Y = K0.2(EL)0.8, where K is capital stock, L is labor input, and Y is output. The savings rate (s), which is defined as
The illustration of arbitrage takes place when: (1) Enterprising students purchase used textbooks much cheaply on E-Bay and sell them to another students at lower prices than bookstore charges. (2) Ivan purchases a stock when it is cheap and sells it
Economists agree that inflation beyond a moderate rate is undesirable as it can often prove disastrous and therefore, it must be kept under control. Economists agree also that an appropriate mix of fiscal and monetary policies can be helpful in controlling inflation.
Describe functions of central bank? Answer: (A) Issue of currency: Central bank is the only authority for the issue of currency
An illustration of how marginal utility diminishes takes place when: (1) Derek finds it tough to laugh politely when he hears a “new” joke for the fourth time now. (2) Amy Sue chooses she would instead have 150 hogs than 151 on her pig far
Why is tax considered as revenue receipt? Answer: Since tax neither makes a liability for government nor decreases assets of the government.
planned investment. planned saving. the difference between planned saving and actual saving. the difference between planned investment and actual saving.
In poor countries people spend a big percentage of their income so that APC and MPC are high. Yet, the value of multiplier is low. Explain why?
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