Which of the following is a correct statement of the impacts of a lump-sum tax?
A. Disposable income will increase by the amount of the tax and consumption at each level of
GDP will decline by the amount of the tax multiplied by the MPC.
B. Disposable income will decline by the amount of the tax and consumption at each level of
GDP will decline by the amount of the tax multiplied by the multiplier.
C. Disposable income will decline by the amount of the tax and consumption at each level of
GDP will also decline by the amount of the tax.
D. Disposable income will decline by the amount of the tax and consumption at each level of
GDP will decline by the amount of the tax multiplied by the MPC.
D. Disposable income will decline by the amount of the tax and consumption at each level of
GDP will decline by the amount of the tax multiplied by the MPC.
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When an economy faces diminishing returns,
A) the slope of the per-worker production function becomes flatter as capital per hour worked increases. B) the per-worker production function shifts to the left. C) the per-worker production function shifts to the right. D) the slope of the per-worker production function becomes steeper as capital per hour worked increases.
According to Davis (1963), industrial firms need capital to expand, grow and develop. They will seek the most efficient means to finance this capital. In the U.S
during its period of industrialization, industrialists raised the resources needed to invest in capital accumulation by (a) tapping into the lending power of giant commercial banks. (b) utilizing the lending power of a large number of small banks. (c) merging. (d) engaging in all of the above.