Short-run decisions refer to the:
A. hourly, daily, or weekly decisions that firms have to make.
B. decisions a firm has to make immediately to prepare for either entering or exiting an industry.
C. immediate decisions that firms have to make that affect level of output, but not the production process.
D. immediate decisions that firms have to make that affect the production process, not level of output.
Answer: A
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Capital gains are taxed at a different rate than income and this reduces revenues the government receives. All else equal, what would happen if capital gains taxes were eliminated?
A) They would have to be replaced by a consumption tax. B) The government would not be able to spend money on any programs. C) Everyone would have to pay less in taxes. D) The deficit would increase because of lack of revenues.
If real GDP exceeds potential GDP, then employment is ________ full employment, and the unemployment rate is ________ the natural unemployment rate
A) equal to; below B) above; below C) equal to; equal to D) below; above E) above; above