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1. During the Reagan administration, the Laffer curve was used to argue that:
the supply-side effects of tax cuts are relatively small
discretionary tax cuts are unwise because they create stagflation
lower tax rates could increase tax revenues
a “flat tax” would simplify the tax code and stimulate economic growth
Two plans have been proposed for an express passenger train between Springfield and Kansas City. The plans are summarized in the table below. Costs and benefits are in millions of dollars. Assume a MARR of 10%. If neither plan is done, then there wou..
Why do members of the House and Senate follow complex, arcane rules and precedents in processing legislation even when such devices keep majorities from getting their way?
Suppose that inflation rate is 8% annually and real interest rate is 1.85% annually. If we are planning to have an amount of money at the end of fifth year which has the same purchasing power as $1361.17 today, how much money we need to deposit each ..
Arkensland is a highly industrialized countr. Prices have been steadily increasing over the last few years and inflation reached an all-time high of 8 % last year. Following this, the central bank came under pressure to reduce inflation to least 4 % ..
Imagine that a "truth serum" existed that, when administered, would make everyone tell the pure, unedited truth in all situations. Discuss the pros and cons of such a product. (Are there times in which lying is necessary/acceptable? Or should it be a..
When conducting incremental analysis, what step must always be taken immediately prior to beginning the pairwise comparisons?
Identify whether each of the following is a flow variable or a stock variable. The total value of all of a company's outstanding bonds. The number of Canadian immigrants living in the United States. Data on recent interest rates can be a good indicat..
Joe deposited $2206 into an account paying 6% compounded annually. In year 4 he made an additional deposit of $3430, but in year 8 he had to withdraw $630. How much does Joe have in his account in 25 years?
If a political candidate said that if she were elected to Congress, she would work toward cutting federal government spending by one-third over the next four years, would she stand much chance of fulfilling her promise? Why or why not? Discuss the pr..
In a small open economy, starting from a position of balanced trade, if the government increases domestic government purchases, this produces a tendency toward a trade deficit and negative net capital outflow.
You are considering buying a new house, and have found that a $200,000, 30-year fixed-rate mortgage is available with an interest rate of 6 percent. This mortgage requires 360 monthly payments of approximately $1,179 each. If the interest rate rises ..
Suppose that two goods are perfect complements. If the price of one good changes, what part of the change in demand is due to the (Slutsky) substitution effect and what part is due to the (Slutsky) income effect? Explain.
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