Questions from General Economics

Q: Describe how antipoverty programs can discourage the poor from working. How

Describe how antipoverty programs can discourage the poor from working. How might you reduce this disincentive? What are the disadvantages of your proposed policy?

Q: In the year 2020, the economy produces 100 loaves of bread

In the year 2020, the economy produces 100 loaves of bread that sell for $2 each. In the year 2021, the economy produces 200 loaves of bread that sell for $3 each. Calculate nominal GDP, real GDP, and...

Q: Does an increase in the price of imported French wine affect the

Does an increase in the price of imported French wine affect the CPI or the GDP deflator more? Why?

Q: Between stocks and government bonds, which type of asset has more

Between stocks and government bonds, which type of asset has more risk? Which pays a higher average return?

Q: Suppose that survey measures of consumer confidence indicate a wave of pessimism

Suppose that survey measures of consumer confidence indicate a wave of pessimism is sweeping the country. If policymakers do nothing, what will happen to aggregate demand? What should the Fed do if it...

Q: Over the past century, has the government’s tax revenue grown more

Over the past century, has the government’s tax revenue grown more or less slowly than the rest of the economy?

Q: Henry Potter owns the only well in town that produces clean

Henry Potter owns the only well in town that produces clean drinking water. He faces the following demand, marginal-revenue, and marginal-cost curves: Demand: P = 70 - Q Marginal Revenue: MR = 70 –...

Q: Explain how corporate profits are taxed twice.

Explain how corporate profits are taxed twice.

Q: Why is the burden of a tax to taxpayers greater than the

Why is the burden of a tax to taxpayers greater than the revenue received by the government?

Q: Why do some economists advocate taxing consumption rather than income?

Why do some economists advocate taxing consumption rather than income?