If purchases of eduction and medical care were counted as investment rather than consumption, GDP would
A) not change, because there is no change in total expenditures
B) increase, because investment is included in GDP but consumption is not
C) increase, because consumption is included in GDP, but investment is not
D) decrease, because investment is weighed more heavily than consumption in GDP
E) decrease, because consumption is weighed more heavily in calculating GDP
Ans: A) not change, because there is no change in total expenditures
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Everything else equal, the AC curve will shift downward if
a. input prices rise. b. input MPPs rise. c. output rises. d. output falls.
A tax system based on the ability-to-pay principle claims that all citizens should
a. pay taxes based on the benefits they receive from government services. b. pay the same amount in taxes. c. pay taxes based on consumption rather than income. d. make an equal sacrifice.