The efficacy of tax incentives as an instrument of activist fiscal policy
A) has been proven to be very substantial in the view of most economists.
B) is not plagued by a substantial lag between the passage of tax legislation and the resulting investment spending.
C) is subject to debate but still is limited by the "legislative lag."
D) has been proven to be so limited that it is no longer considered to be a serious option by most economists.
C
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Assume you have a credit card balance of $2,000 at 15 percent and the inflation rate is 3 percent. What are the nominal and real interest rates?
A) 15 percent nominal and 12 percent real B) 12 percent nominal and 15 percent real C) 15 percent nominal and 3 percent real D) 3 percent nominal and 12 percent real E) 15 percent nominal and 18 percent real
The substitution effect indicates that higher real interest rates ________ current consumption for households who are lenders and ________ current consumption for households who are borrowers
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease