Economists in different areas are on the lookout for "natural experiments" that can help provide strong evidence on a subject. An example of such a natural experiment
A) Exists in the case of the split between East and West Germany after World War II and how this provides evidence on the importance of protective institutions
B) Exists in the case of the adoption of new technologies like the rail engine after 1850 and how it provides evidence of the importance of technology
C) Exists in the case of the trade between states like Washington and Florida and how it provides evidence on the value of trade
D) Exists in the case of the case of the U.S. and Mexico given their location in North America
Answer: A) Exists in the case of the split between East and West Germany after World War II and how this provides evidence on the importance of protective institutions
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The country of Old Jersey produces milk and butter, and it has published the following macroeconomic data, where quantities are in gallons and prices are dollars per gallon. Between Year 1 and Year 2, nominal GDP grew by
A) 60.0%. B) 65.5%. C) 83.3%. D) 190.0%.
Refer to Figure 16.5 below. If the marginal cost of underreporting can be written as MC = X 2 +
(A) What is the maximum marginal tax level (t) possible that will ensure tax evasion is zero?
(B) If the Marginal Tax rate is equal to 0.56, how much income will be evaded?