Firms will try to signal superior quality of their goods by:
A. advertising.
B. making sales information available to the public and advertising.
C. issuing warranties or guarantees.
D. making sales information available to the public.
Answer: C
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Which of the following helps determine the growth rate of potential GDP?
I. capital accumulation II. technology advances III. growth in the quantity of money A) I B) I and II C) I and III D) I, II and III
The tax cuts in 1981 and 1982 did not lead to growth in GDP as did the tax cuts in 1964. One reason for this difference was that
A) the 1981-82 tax cuts concentrated on personal tax cuts, but the 1964 cuts were for both personal and corporate taxpayers. B) the saving rate increased in 1981-82, but it decreased in 1964. C) expansionary monetary policy accompanied the 1964 tax cuts, but the 1981-82 cuts were accompanied by restrictive monetary policy. D) tax indexation was built into the 1981-82 tax-cut program, but in 1964 there was no indexation.