Which of the following is not a characteristic of the Earned Income Tax Credit (EITC)?
a. It does not discourage recipients from working.
b. It is less distortionary than other anti-poverty programs.
c. It helps the disabled who cannot work.
d. It applies only to the working poor.
c
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Assume that we want to drive our economy out of recession by generating a $400 billion change in national income. The MPC is 0.8 . Which of the following policy prescriptions would generate the targeted $400 billion change in income?
a. $120 billion increase in government spending and $50 billion increase in tax revenue b. $140 billion increase in government spending and $70 billion increase in tax revenue c. $160 billion increase in government spending and $120 billion increase in tax revenue d. $220 billion increase in government spending and $100 billion increase in tax revenue e. $400 billion increase in government spending and $300 billion increase in tax revenue
What happens to the Canadian monetary base if there is an excess supply of 100 million euros in the foreign exchange market, which the Bank of Canada purchases?
a. The Canadian monetary base falls by 100 million euros worth of Canadian dollars. b. The Canadian monetary base falls. The amount depends on the size of the money multiplier c. The Canadian monetary base might fall or rise. d. The Canadian monetary base rises by 100 million euros worth of Canadian dollars. e. The Canadian monetary base rises. The amount depends on the size of the money multiplier.