Which of the following is classified as an intermediate good?
i. the purchase of a Big Mac by a college student
ii. McDonald's purchase of pickles
iii. a McDonald's restaurant owner's interest payment for the loan on her building
A) ii only
B) ii and iii
C) i only
D) i and iii
E) i, ii and iii
A
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Why is it unlikely that tax increases will be the way to eliminate current U.S. federal budget deficits?
A) The revenues generated by increasing taxes on the rich would only pay for a small portion of the federal budget deficit in any recent year. B) Increasing every worker's taxes by the same amount could eliminate the deficit, but it is likely this action would be viewed as too burdensome for workers with modest incomes. C) Since World War II, on average when taxes were increased by a dollar, federal government spending increased by that much and more. D) All of the above.
Nonunion wages should be modeled as
A) sticky, because they imitate union wages rather closely. B) sticky, because their contracts cannot contain COLA clauses. C) perfectly flexible, because wage contracts are illegal outside of unions. D) perfectly flexible, because workers willing to take the risks of full wage flexibility are precisely those workers who have rejected unionization.