Briefly describe orthodox stabilization policies
What will be an ideal response?
Minimizes government involvement in the economy and prescribes government spending cuts, tax reform, and control over money supply growth to fight inflation
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Procter & Gamble Co is a major soap producer. All of the following, except one, would shift its supply curve of liquid soap to left. Which is the exception?
a. an increase in the price of bar soap b. an increase in the price of a key ingredient of liquid soap c. environmental regulations force Procter & Gamble to use a more costly technology to produce liquid soap d. a decrease in the price of liquid soap e. an increase in the wage rate for factory workers who produce liquid soap
Which of the following is an example of an excise tax?
a. a tax on the wages that a firm pays its workers b. a tax on tobacco c. a tax on corporate profits d. the portion of federal income taxes earmarked to pay for Social Security and Medicare